If you’re like many Americans, you don’t have an estate plan. Perhaps it’s because you don’t think you need one. You might assume that your assets are modest and your situation is simple, so you don’t need to bother with formal estate planning documents. This could be a mistake.
According to Life & Health Advisor, a recent survey found that 60.4% of respondents don’t have a will. In many cases, misconceptions may be preventing people from taking this important step. For example, 22.8% of people who think estate planning is too expensive overestimate the cost by hundreds or thousands of dollars.
Another common misconception is that a will isn’t needed because property will pass to the spouse even without a will. In reality, however, the situation can be more complicated than that, and estate planning can do much more than ensure that your assets go where you want them to.
Understanding Estate Planning Laws
State law determines what happens to a person’s estate if they die intestate, or without a will. In Oregon, Chapter 112, Intestate Succession and Wills, establishes the relevant legal code.
Under Oregon intestate succession rule, and depending on the specifics of the situation, the estate may go to the surviving spouse, or it may be divided among a surviving spouse and children, or it may go to another relative. If someone passes without any surviving relatives, the estate may even go to the government.
Planning for the Unexpected
The rules for intestate succession make sense in many cases, but relying on them completely may mean that your wishes are not carried out. Consider the following situations:
- What happens if your spouse dies before you or at the same time? If your plan is for your estate to go to your spouse, you should consider what would happen if this is not possible.
- Also, what if your children have different needs? For example, you might have one adult child with special needs. Alternatively, you might have an adult child who is irresponsible with money. A good estate plan can take these issues into account.
- What if your family fights over your estate? People who are part of blended families, for example, should consider the complexities that can arise. A solid estate plan can help your family avoid disputes over who is entitled to what.
An estate plan can help you plan for all the what-ifs.
Beyond the Distribution of Assets
An estate plan can ensure that your assets are distributed according to your wishes, but its value extends far beyond that. In addition to the will, there are trusts, advance directives, life insurance policies and other key documents to consider.
For example, estate planning can ensure that your loved ones and even your pets receive the care they need once you’re gone. You can use your estate plan to make a contribution to a charity that is dear to your heart, or to help minimize the tax burden that your heirs will receive. With incapacity planning, you can also make sure that your wishes will be carried out if you become incapacitated and unable to express your wishes for medical care.
Do you have questions about your estate? We can help. Contact us for all your estate planning needs.