In today’s economy, “estate planning” may seem to many like a stuffy luxury that they can’t afford. It’s true that working with a lawyer to create a will, set up a trust, and create other official documents can be an investment (though some estate planning lawyers are more affordable than presumed!). However, what most people don’t realize is that skipping this important process – while it will save them money now – will cost them and their families even more money later on.
If you’re hesitant about the costs of legal fees, here are 4 ways that estate planning can save your family money so you can feel more confident about making a decision!
1 – Estate Planning Prevents Probate.
Probably one of the biggest ways that estate planning can cut expenses for you and your loved ones is by keeping your money out of probate court. Probate is a process that usually has to occur if you don’t have a trust (a fiduciary agreement that shields your money from creditors and distributes it at the time of your death). The goal of probate is for the state to validate your will, if you had one, or to distribute your assets to your beneficiaries according to state law if you didn’t. Either way, it’s tedious. There’s a lot of paperwork your loved one has to fill out, and there are many fees – court fees, appraisal fees, etc. – that they will have to pay. Probate can be a few thousand dollars or more, so it’s better to take this cost out of the equation by planning ahead to avoid it!
2 – Estate Planning Stops Family Fighting Before It Can Start.
Situations where someone passed away and there wasn’t a clear or legal record of their wishes left behind can turn incredibly messy, incredibly quickly. When money and grief mix, tensions can rise fast, particularly if there was already disagreement in the family or strained family relationships.
For example, say Joanne, a mother of three adult children, passes away without a will. One of the children lived with her, took care of her, and paid for many expenses during her final few years, and is expecting to receive a greater share of the inheritance as a result; the other two children, however, believe that they should get an equal share because they are not as financially well-off as the other and it was only a few years of the other taking care of her. Or imagine that one of Joanne’s children always expected to inherit her heirloom jewelry, only to find out at the time of her death that the other two did as well, and none of the children are willing to give up their claim to that possession. These siblings may end up fighting so much that they go to court to get what they want; this can turn into a lengthy legal battle that may leave the siblings estranged and cost them thousands or more in attorney and court fees.
“Who gets what” can be a highly emotional – and expensive – question. Don’t let your family ask it when you’re not around to answer! Taking the time to clarify your wishes now is the best way to protect them later.
3 – Estate Planning Can Minimize Taxes.
Taxes are a necessary “evil”, but that doesn’t mean that you have to just sit back and pay the maximum amount you owe! There are plenty of legal strategies to reduce the amount that you and your loved ones will have to pay, such as gifting, funding certain types of accounts, and more; while the average Joe doesn’t have to worry about estate taxes, if you own a business or have sizable wealth, this should be a priority for you!
4 – Estate Planning May Pay For Nursing Home Care.
Estate planning isn’t just a valuable tool in the event of your death – it can also prove to be a lifesaver (literally) in the final decades of your life when you may need to enter an assisted living facility!
Most seniors will require additional medical assistance at some point, but most seniors don’t realize just how expensive a nursing home can be. In Florida, the average is around $8,000 per month, and neither Medicare nor most private health insurances cover it. Without an estate plan in place, seniors will either have to pay this amount themselves (depleting the amount that they can leave as an inheritance to their children and grandchildren), or their families will have to pay for their care, or they will have to go without it.
If you want to avoid this heavy financial burden – which can be incredibly stressful and sad to deal with for you and your entire family – you can shield your assets and income in trusts and in other ways so you can apply for Medicaid (an income-restricted form of government financial aid that can pay for nursing home care) and qualify!
Work With A Cost-Effective Law Firm You Can Trust
Some people know that they need to plan out their estate, but still want to avoid the costs of hiring an attorney, so they take a DIY approach. They try to download templates online or follow online advice to create the simplest possible documents. However, this can (and often does) backfire! Information on the Internet isn’t always accurate. It’s not always compliant with the most recent state laws, and it’s not personalized; when the time comes for you and your family to rely on your estate plan, you may find it invalid and completely useless.
Estate planning costs money, it’s true, but working with an attorney is the best way to ensure that all your ducks are in a row (and legally solid!). Elder Law, P.A. has been helping Floridians find peace of mind for the future through estate planning since 2015. No one is guaranteed tomorrow. If you don’t have, at the very least, a will and trust in place yet, contact our law office today to schedule a completely free consultation. You have nothing to lose and much money to save! We can explain your options and next steps.