There is a widespread misconception that estate planning is a subject of interest only to the wealthy. By not deciding who's going to be in charge and what's supposed to happen, a combination of luck and state law will control your property upon your death. Whether it involves a fortune or a modest sum, there is no way for anyone to enforce your intentions without a formal, legally binding plan. The chance that everything will work out fine without a bit of planning is very slim. Bear in mind that families can be torn apart in jockeying for legal authority, small sums of money, or even minor household items.
What not to think
If you want your wishes to be fulfilled at your death without starting World War III, avoid the following age-old invitations to disaster:
In all the often-heard statements above, people mistakenly think they have their affairs in order. These well-intentioned folks are asking for family squabbles and other often unforeseen problems.
For many people, an important part of estate planning is seeing to it that their wishes for children or grandchildren are implemented. This includes the choice of a guardian for minor children, as well as guidance as to how the kids should be cared for and how funds destined for their benefit should be managed and distributed. Even people with adult children are concerned about money management.
Important people to appoint
Why should you care who will be named as your personal representative? Somebody must be given responsibility and the necessary authority to "wrap up" your affairs—pay debts, as well as preserve, gather and distribute your assets in accordance with your wishes. This person is called an executor if you have a will, or a trustee if you have a trust. Your personal representative should be a trustworthy person (or bank) with common sense, good judgment and the fairness of a referee. The personal representative may hire lawyers, accountants and other professionals with estate funds for assistance, but fees and other costs can be saved if the personal representative and/or family members are able to do some of the legwork themselves.
If you don't appoint someone
Without an estate plan, your personal representative will be chosen by the court, and might not be the person you would have wanted. Sometimes, family bickering develops over who should be appointed by the judge. Often, a neutral lawyer is appointed and must be paid with funds you leave behind.
Doing it yourself
Before examining the tools of estate planning, a word about "doing-it-yourself" is in order. A great deal of self-help is possible for the lay person who takes time to educate him or herself. But people do need attorneys in most estate planning, probate and other legal situations—at least for a consultation, or to answer some questions.
Of course, not all "do-it-yourselfers" are doomed to failure, but they take a substantial risk of overlooking a potential "complication" that would be obvious to an attorney. With that said, some clients use software programs just to learn a little and "get something on paper" before consulting a lawyer.
Will preparation software and online services can produce adequate results in simple situations. Often, however, these approaches don't fully deal with the particular details, contingencies and very specific issues that are likely to be critically important to your family.
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