Why Everyone Needs to Have Estate Planning

Estate planning covers far more than a will to distribute your assets on death. It also creates a plan for how you use assets while you are alive, how to protect your loved ones from unexpected events and conveying your wishes, if you become incapacitated.

Without an estate plan in place, would your spouse and heirs know what you wanted to happen if you became unable to communicate with them? Or if you died unexpectedly? One of the goals of estate planning is to share your thoughts and wishes. Another is to spare your heirs the costs and stress of guessing what you would have wanted to take place.

The McPherson Sentinel recently published an article, “Estate planning prevents headaches” that says there’s no way to determine your wishes regarding distribution of your property after your death, unless you take action before you pass away. Estate planning is worthwhile, regardless of the size of the estate.

Probate is the legal process by which the court validates the decedent’s will, if there is one, gives authority to the executor, or appoints an administrator if there’s no will. This process assures that taxes get paid, any property is distributed correctly and legally transfers the ownership of the property.

All property is subject to probate proceedings, with or without a will. The only exceptions are the following:

  • Property owned in joint tenancy with another;
  • Property placed in a trust;
  • Property subject to a transfer on death deed;
  • Payable on death accounts; or
  • Life insurance proceeds designated for a named beneficiary.

Property in any of these categories automatically passes to the joint tenant, designated beneficiary or trust beneficiary. However, these assets may be subject to inheritance and estate taxes.

Typically, a regular probate proceeding can take a minimum of six months from the date the interested parties receive notice to file their claims against the estate. Some states have more streamlined and simplified proceedings that are less time-consuming which can be used in certain situations.

The cost of the probate proceedings depends upon the complexity and value of the estate. In Kansas, fees for the attorney and executor or administrator are also charged to the estate.

An estate planning attorney can assist you in creating your estate plan, including what options you’d like to use to avoid probate. Transfer on death deeds, naming beneficiaries to bank accounts, mutual funds, bonds, CDs and life insurance funds can all be transferred to heirs. However, to avoid probate, they have to be handled properly and according to the laws of your state.

Reference: McPherson (KS) Sentinel (September 29, 2017) “Estate planning prevents headaches.”