Massachusetts residents frequently hear that they should have an estate plan. However, some may not be aware of why it is important. Wills, trusts and other estate planning documents provide an individual and his or her family with numerous benefits.
Having an estate plan takes the guesswork out of what to do if an individual becomes incapacitated or passes away. Family members can receive clear instructions on how to care for a person should he or she not be able to make crucial healthcare and financial decisions through powers of attorney and advance care directives. Wills and trusts outline how assets are to be distributed upon death.
Many people have estate plans in order to minimize their tax liability and the tax liability of their heirs and beneficiaries. This allows everyone to receive the maximum benefit from the assets covered, including organizations that receive charitable contributions from the decedent. An estate plan can help achieve many different goals, including passing on the family business.
Some people believe that simply discussing their wishes will be enough. However, without at least a will, the state of Massachusetts may have to decide who inherits an individual's assets. If an individual has minor children, without a document outlining who will care for those children, the state may be called upon to make that determination as well.
Estate planning documents can provide everyone peace of mind. Family members are often distraught when a loved one becomes incapacitated or dies and having an estate plan is one of the best gifts anyone can leave behind. The value of obtaining wills, durable powers of attorney and advance care directives -- at a minimum -- far outweighs the discomfort in contemplating one's own demise or loss of mental faculties.
Source: Fox Business, "The Biggest Estate Planning Mistakes You Can Make", Kelly Trageser, April 7, 2014