3 People You Protect With A Good Estate Plan
It is no news that estate planning is one of the most responsible decisions you can make as a working adult, but there are a lot of people who still fail to go through this legal process. What many do not understand is that not having an estate plan in place can make things harder on certain people around you whose lives must go on after their passing. Check out this short list of people you will be protecting just by working with your accountant and your attorney to create a good estate plan.
When you die and leave behind minor children, it can be tricky for the estate to be granted to them if you have not left behind a specific outline of how you want things handled. With a good estate plan, you can name someone as the primary guardian of the children, allocate a certain portion of the estate for your child's care, and even set up a trust account for that child to take over when they reach legal age. If there are no plans in place, the court will likely designate the most logical next of kin as the guardian, and that person could end up with your entire estate.
If you are like a lot of people, you will assume that your spouse will inherit everything when you pass away regardless of whether or not you have an estate plan in place. In some states and in some situations this can be true; however, if there is no estate plan, other people in the family can step up and claim they should inherit part of your estate. For example, if you have not been married very long, your adult children may try to contest your spouse getting your estate.
People You Owe
If you have a longstanding relationship with certain creditors, lenders, or financial institutions, you will definitely want to make sure they are not left owed a lot of money if something happens to you. While people you owe can technically file a claim against your estate when you're gone to get the money they are owed, it is much better if you have a legal plan in place specifically stating how they should recoup the money you owe them. Otherwise, the money they should be getting can be left tied up in legal battles for quite some time.