Without an Estate Plan, you have no control over what happens to your loved ones and your assets during emergencies or if you were to pass away. Moreover, your family will have to spend time, money, and effort to gain legal access to what is rightfully theirs.
To understand more clearly what happens if you don’t have an Estate Plan, you need to know what Estate Planning is and what it does. It enables you and your loved ones to stay legally prepared for any emergencies. These emergencies could include financial losses, a disability of a dependent, financial conflicts, a pandemic, a natural disaster, your untimely incapacitation, or your death.
However, creating an Estate Plan is important for plenty of other reasons too. Here are some things that could happen if you do not create one:
- The court distributes your assets on your behalf: In the absence of an Estate Plan, your Executor would not know how to distribute your estate to your family and friends. Instead, your state law decides how your assets should be distributed. Courts only recognize legal relations. You need Estate Planning documents if you want your assets to be transferred to an unmarried partner or your friends.
- Your heirs receive assets in lumpsum: You might want your heirs to receive funds in regular intervals, especially if they’re minor. However, your heirs will receive all their inheritance at once if you don’t create an Estate Plan. This can be especially problematic if any of your family members are financially irresponsible.
- The court chooses your Executor: Choosing someone your trust and your heirs are comfortable with ensures your Estate is managed just the way you want it to be. However, the court will appoint an Executor for you if you don’t name one. This could be anyone, although in most cases it is a family member.
- The law decides who takes care of your kids: Writing a Will lets you name guardians for your minor kids if you were to pass away. However, if you do not leave a Will, a court decides your kids’ guardians.
- Courts decide who looks after you in a medical emergency: An advance directive lets you outline instructions on how you should be taken care of if you’re not able to. Even if you know that a specific someone would do it, they are not legally allowed to without the document. In such cases, the court decides who should take care of you.
- You surrender your control: Without creating an Estate Plan, you would be giving away all your control to the state law and your unintended Executors and heirs. This can easily be avoided if you create one.
- You have unintended heirs: Estate Planning ensures that your assets are transferred to only those you mention. Otherwise, the court decides on your behalf and your Estate proceedings might go to someone you would not choose.
- Increases tax burden for your family: With careful Estate Planning, you can create Trusts to reduce state inheritance taxes and federal estate taxes. If you do not, however, your Beneficiaries would spend most proceedings from your Estate on taxes.
- Your family wastes time, effort, and money: Probate processes take a long time to be resolved. It could be months or even years, depending on the complexity of your Estate. Your family will also have to spend money for legal help.
- Everything becomes public: In probate court, everything about your Estate is recorded in public documents. If you want any part of your Estate to stay out of probate and remain private, using a Trust in your Estate Planning process can help you do this.
- Emotional burden on your loved ones: Your Estate Plan helps your family have confidence and a sense of direction in the steps they take next, after your passing. However, in the absence of one, your loved ones are faced with the legal, financial, and emotional burden to manage your Estate while mourning your loss.
- Create family disputes: Not leaving instructions on how your estate should be managed and distributed can create disputes within members of your family. This can be easily reduced if you create an Estate Plan that leaves detailed instructions behind.
Therefore, creating an Estate Plan can ensure that you and your family are at peace, with no worries about your assets or preparations for emergencies.
Clocr enables you to create a safe, secure, and easy-to-use Digital Estate Plan in no time!