Valentine’s Day is approaching and how do we say I love you to our loved ones? Flowers, chocolates and jewelry are wonderful gifts but in today’s world, ensuring that you set up your estate plan might be the best way to say “I love you”.
There are many misconceptions about estate planning. The most common misconception with married couples is that “I Love you” wills” is all they need. “I love you” wills are not effective for a good estate planning strategy.
Let’s talk about Anne and Don. Anne and Don have been married for years but it is a second marriage. They have I love you wills as their estate plan. Unfortunately, Don passed first and Anne receives all of the assets. This leaves no guarantee that Don’s kids will inherit any of his assets after Anne passes. Anne is still able to change her estate plan or beneficiaries on her accounts and this could cause some descendants to be excluded which would not follow Don’s original wishes. This is a typical case of the inadvertent disinheritance without realizing it is happening. Having a trust can help avoid this situation.
There are many reasons to not go with a basic estate plan. Here are just a few issues that could come up. First, asset protection can be a problem. If your loved one inherits funds outright and they have creditor issues, then the funds could be in jeopardy. Secondly, wills do need to go through probate. This can cost your loved one time and money along with going through a frustrating process with the court. Next, a will only become effective at your passing so if funds are in a trust, the guardianship court involvement can be avoided. Lastly, not many people need to deal with estate tax issues but having basic wills will definitely cause an issue especially if you win the lottery or inherit funds in the future. Of course, there are many other issues that could arise. Having a trust can provide protection and flexibility to handle these complex issues.
The ultimate gift for Valentines Day would be to set up your estate plan. Maybe not the most romantic gift, but definitely will warm your loved one’s heart when they know they are being taken care of for the future. Please feel free to contact our office for a free consultation at 321-610-4542 to talk about setting up your plan.