Who Needs an Estate Plan and When?

As we enter a new year, we often take time to reflect on our life. What have we accomplished thus far and what are our goals for the next 12 months? Although no one wants to talk about it, part of a life assessment includes how our legacy will continue after we die. Getting your affairs in order—and keeping your wishes up to date—is the best way to ensure your loved ones will be properly provided for after you’re gone. That may have you questioning who needs an estate plan – and if the answer is you.
 

What Is an Estate Plan?

Simply put, an estate plan outlines how you will transfer assets from your estate to your heirs after you die, and who will be authorized to take care of you if you are incapacitated. Without a plan in place, your family may be unclear about your wishes for how your property and money will be disbursed among them (or to foundations and charities of your choice). Plus, without proper planning, you’ll also be putting them through the rigamarole of probate court, which is costly, time intensive, and can be easily avoided with a little advanced planning
  • Avoiding probate court
  • Reducing estate taxes
  • Reducing capital gains taxes
  • Protecting loved ones
  • Protecting assets
  • Saving time and money
With those benefits of having an estate plan in mind, you may still be wondering who needs an estate plan. The answer is simple: nearly everyone.
 

Who Needs an Estate Plan?

If you have assets or loved ones—which most of us do—you should consider an estate plan. In just thinking about your assets, if the value of your estate exceeds the probate court threshold, you have your answer to who needs an estate plan: you.
How much can you have in your estate before probate court is required?  The basic answer for 2022 is $166,250.  However, real estate, regardless of value, requires some court intervention in California to transfer to your heirs.
Regardless of the value of your estate, having children, a blended family, or owning a business puts you in the category of who needs an estate plan. Remember, no matter the size of your estate, having a plan in place will help your heirs avoid probate and ensure that your wishes will be carried out. And if you are incapacitated, your estate plan becomes invaluable since it includes a financial power of attorney, and a power of attorney for healthcare, including a HIPAA authorization. These will all help your family manage your finances and care in the event you are unable to do so yourself.
 

When Do You Need an Estate Plan?

If you don’t already have an estate plan, now is a good time to start planning. In fact, yesterday, last week, or last year would have been better. The problem is that no one has a crystal ball to tell them when they’re going to die or become incapacitated. And short of foreseeing the future, you should be prepared at all times.
Most people tend to start their estate planning either when they retire or have a significant health issue. Here are the real times when it’s smart to start your estate plan:
  • You get married or divorced
  • You have children
  • Your spouse dies
  • You are facing an illness that may leave you incapacitated
  • You own a business
  • You are starting a blended family
  • You have children with special needs
 

If you an unsure if you are one of the people who needs an estate plan, it’s best to consult an estate planning attorney who can offer you the advice you need.

For more than 30 years, Joel A. Harris has been protecting the estates of families throughout California. If you want some help navigating the ins and outs of protecting your estate or establishing a trust to protect your future, feel free to visit us online, in person, or call us by phone at (925) 757-4605.