Yes, everyone needs a will, a trust, or both. These important tools ensure your legacy is carried out according to your wishes and allow you to provide for loved ones after your passing. 

A properly prepared trust can also help avoid probate. This lengthy, public, and often expensive court process becomes necessary when there is no legally valid estate plan in place to distribute your accounts and property after your death. 

Wills and trusts are not just for the wealthy: People at any income level can benefit from having a clear plan in place to protect their loved ones, avoid unnecessary legal hurdles, and ensure their wishes are honored. Even if your savings are modest or your property has mostly sentimental value, these planning tools provide peace of mind and control over what happens after you are gone. Creating a will or a trust should be a priority for several important reasons.

Handling Digital Accounts

Almost everyone has at least one online account or digital presence. Think about all your photos stored in the cloud, as well as your emails, social media profiles, online shopping accounts, online payment platforms (e.g., Venmo or PayPal), and online banking accounts. Whom do you want to have access to them? Do you want the accounts deleted or transferred to someone else? What happens if the account holds money? How do your loved ones access that money? An estate plan ensures that your online photos, records, and accounts do not get lost or locked. 

Avoiding State Recovery for Medicaid Benefits

Nursing homes can cost thousands of dollars per month. Medicaid is a cost-sharing government program that supplements the costs of a person's long-term care, so long as they meet certain asset and income requirements. However, the state Medicaid agency might try—and is legally allowed—to recoup the money spent on your care from certain accounts and property you own at the time of your death. A comprehensive estate plan may be able to prevent or limit the state from recovering these costs from your bank accounts or, under certain circumstances and only in some states, forcing your loved ones to sell your family home to pay back your nursing home care costs. 

Reducing Income Tax Concerns with Retirement Accounts

An inherited retirement account is not always tax-free (depending on the type of account). While an estate or inheritance tax may not apply, the beneficiary may have to pay income tax on the amount received, based on their current income tax bracket. Including your retirement accounts in a proactive estate plan can help protect your nest egg and possibly limit your beneficiaries' income tax burden when they inherit these accounts.

Maintaining Control of Your Legacy and Protecting Beneficiaries

Estate planning can help ensure that your money and property are distributed in accordance with your wishes after your death. For example, if you want to provide not only for your surviving spouse but also for your children from a prior relationship, your estate plan can help you do that. It can also protect your beneficiaries' inheritances from claims by divorcing spouses or creditors, pending lawsuits, or exposure to financial predators. With a plan, your money and property are also less likely to be lost to your beneficiaries' mismanagement or frivolous spending—a surprisingly common outcome when no safeguards are in place. In fact, studies show that 70 percent of family wealth is depleted within the two following generations and 90 percent within three generations. With thoughtful planning, you can avoid becoming part of that statistic.

How We Can Help

An estate plan can also help ensure that your values are passed on to the next generation and that your wishes are legally documented so everyone understands them. Discussing your wishes with your loved ones will not make your plan for the future legally enforceable. The only way to ensure that your goals are carried out is to work with an experienced estate planning attorney to create a will or a trust. Do not put off this important step. Taking the time to plan will save your loved ones stress, money, and heartache in the future. It is truly a gift to them.

Contact us today to get started.

This article is a service of Jacklyn A. Truppa of Dynasty Law, LLC. We don't just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love.

The content is sourced from Dynasty Law, LLC, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own, separate from this educational material.