By Heather Agun, Edited by Becky Pearsall

*Created under the direct legal supervision of Stephen Waltar.   See Disclaimer

Photos by Heather Agun

 

Most plans in life are made with the intention of seeing them through. Career plans, vacation plans, home renovation plans… we carefully lay these out with the expectation of accomplishment. Once we have seen our plans come to fruition, we rejoice in our success! Estate plans are different because many of the documents don’t take effect until after we have passed away. At this point, we aren’t around to experience the results of the plan we created. This is why many people create an estate plan for more than just themselves. In talking with our clients, we actually hear three major motivators for why people plan. Which one is yours?

For Your Family

One of the most common incentives to plan is caring for family after we’re gone. Knowing that loved ones are taken care of later creates a great sense of peace now.

Here are a few common ways people plan for their families:

• Listing guardians for minor children in wills
• Using estate plans to lessen or prevent estate taxes
• Protecting wealth from healthcare costs with pre-Medicaid planning
• Leaving funds to beneficiaries in a smart and protected way

 

The last reason deserves some elaboration, because just leaving someone a large sum of money doesn’t necessarily equal taking care of them. Research has concluded that the average beneficiary of a large inheritance in their 20s, 30s, or 40s, quickly loses half the money through spending or poor investments. This is further evidenced by a study that found that one in three lottery winners goes bankrupt.

The average beneficiary of a large inheritance in their 20s, 30s, or 40s, quickly loses half the money through spending or poor investments.

Perhaps when someone receives a large sum of money, they don’t view it the same as they would if they personally had to work for it. Still, no one wants their hard-earned estate to be wasted. This is why our clients come to us to ensure their estates pass to their heirs in a thoughtful and protected way. Here are a few common examples of how clients can give to their heirs in a way that will protect both the estate and the beneficiaries:

• Young beneficiaries – Special postponement language can help protect from a variety of troublesome scenarios that are unforeseen for children.
• Special needs beneficiaries – Inheritances can be given in ways that don’t interfere with possible government assistance.
• Spendthrifts – Beneficiaries with budgeting concerns can receive funds over long spans of time, or under certain conditions, to ensure their inheritance will continue to support them and won’t be wasted on frivolities.

• Anyone – Estates left to adults who have no budgeting or other concerns still benefit by using trusts that can protect from unexpected litigation, divorce, bankruptcies, and more.

Estates left to adults who have no budgeting or other concerns can still benefit by using trusts that can protect from unexpected litigation, divorce, bankruptcies, and more.

Proper estate planning can help protect both finances and loved ones, leaving a legacy that will help ensure the continued success of a family.

For the Causes that Matter to You

In a way, everybody already has an estate plan. The government has created a one-size-fits-all plan for anyone who hasn’t taken the time to create their own. The problem is, this one-size-fits-all plan doesn’t fit almost anybody – especially people with blended families, or those who want to donate to charities that matter to them. No matter how much you care about a cause, your estate will never go to support it without an estate plan.

We often help our clients donate all or part of their estates to causes, charities, and universities that are close to their hearts. We can also help devise ways to donate the part of an estate that exceeds tax exemptions, so that instead of part of your hard earned money going to the government, it will pass tax-free to a charity that matters to you.

For Yourself

Many people ultimately plan for themselves. Although they may not be around to see much of their estate plan in action, not all the documents in an estate plan wait until death to work.

Powers of Attorney and health care documents are an essential part of an estate plan, and they protect your wishes while you still live. Financial powers of attorney can allow someone you trust to help you manage finances now, or ensure your finances are managed if you become incapacitated. Healthcare powers of attorney can designate someone you trust to make your healthcare decisions if needed and avoid the possibility of a guardianship. Other healthcare documents can help protect your wishes in other ways.

It’s important to remember that not all the documents in a good estate plan wait until death to work.

Even when planning for after you pass, you may just want to know you have provided for those you love. Another common and compelling reason is to ensure the things you’ve worked hard for will be appreciated when you’re gone, and not lost to taxes or frivolous spending. It is important to know that you’ve left your mark on the world by leaving a legacy, and a good estate plan is a great way to do that.

What motivates you to make an estate plan?

Regardless of which reason speaks to you, it is important to have an estate planning attorney you trust to prepare documents that will support your wishes. If you are interested in learning more about what kind of plan could work for you, call our Estate Planning office in Bellevue to make an appointment. If you are an existing client but it’s been more than 5 years since your last appointment, we recommend you make a free review appointment to ensure that your plan still reflects your needs regardless of any family, financial, or legislative changes.

 

*This blog post was written under the supervision of an attorney, Stephen M. Waltar, and all legal opinions shared are that of the attorney.