Estate planning is the single most overlooked part of a financial plan. Many assume that they are not wealthy enough for a financial plan or too young to worry about it. An estate plan isn’t for you, it’s for your survivors. Anyone can pass away at any age, accidents happen. It requires minimal effort to prepare and update an estate plan, especially in the early years.
Individuals who pass without a will or any form of estate plan in place are said to pass intestate. States have laws of intestacy in place that provide guidance for the distribution of assets in the absence of sufficient guidance (i.e. will or other estate tools). When passing intestate, the individual is essentially asking the state to make distribution decisions for them. Though the state does its best, most often the distribution does not play out how the deceased would have preferred.
Some individuals see this as a minor issue because they believe they have little to give. Most have more to give then they believe. Even so, that isn’t what it’s about. It’s about saving your family the trouble, stress, and inconvenience of dealing with legal issues during their grieving period. It’s about ensuring that minor children are taken care of by the right individuals instead individuals chosen by the court. It’s about ensuring that the distribution is as tax-efficient as possible and in a manner desired by the decedent.