Creating an estate plan can accomplish several goals, such as providing financial stability for a spouse, minimizing expenses, preserving assets for future generations, and ensuring that chosen, trusted individuals can make decisions on your behalf in the event of incapacity. Oftentimes, people misunderstand the goals of estate planning and perceive the process as unnecessary if your estate is monetarily irrelevant. However, this misperception will cause more harm than good, creating expense, uncertainty, and confusion.
Drafting a will or trust will help to transfer assets to chosen beneficiaries at the time of your death. If you have real property in your estate, for example, you can dictate in your will who will receive title to the real property after your passing. Once your representative submits your will for probate in court, the real estate will be transferred to the designated beneficiary. The judge can also enter an order transferring title to the named beneficiaries, which is recorded in the same manner as a deed. Conversely, if you do not have a will at the time of your death, the probate court will transfer your real estate according to the intestate laws of your state. Under this scenario, your real property may pass to unintended heirs, which could create confusion for those who matter most.
Planning for incapacity is also an important part of an estate plan that does not correlate with the value of your estate. Power of attorneys, both medical and durable, are essential parts of any estate plan, so your wishes can be carried out by a trusted agent should you become incapacitated during your lifetime. Designating a trustworthy individual to manage your medical and financial decisions in your time of need will provide assurance and eliminate all uncertainty. Ultimately, creating an estate plan focuses little on the monetary value of your estate and greatly on making sure your estate is secure for the future.