7 Reasons You Need an Estate Plan
We believe that estate planning is about more than just having a will or a set of documents. Estate planning provides you with the opportunity to provide for loved ones, minimize taxes, protect privacy, and avoid government and court intervention. Common concerns that are addressed in the estate planning process include:
“How can I make my future incapacity or passing easier on my family?”
"How can my assets avoid probate after my death?"
"How can I protect my children's inheritance from creditors or divorce?"
"How can I minimize Massachusetts estate taxes?"
"Do I need a will or a trust?"
To help address these common concerns, we have highlighted the seven main reasons why you need an estate plan.
1. Control Asset Distribution After Death
By having an estate plan, you decide who gets your assets upon your death. Without this planning, assets such as real estate, life insurance, retirement accounts, and personal belongings may pass to distant relatives, former spouses, or even to the state itself. Because some assets are distributed by beneficiary designation rather than by will or trust, our estate planning process ensures beneficiary designations on your financial accounts are properly coordinated with your plan to ensure the efficient transfer of the assets to your beneficiaries. Without a plan, your assets might be divided in a way that surprises you. For example:
If you're married with children from previous relationships, your spouse receives the first $100,000, and 50% of the remainder, while the rest is divided equally among your children.
If you’re married without children, but your parents survive you, your spouse receives the first $200,000, and 75% of the remaining assets, with 25% going to your surviving parents.
2. Plan for Incapacity
Estate planning includes conversations about incapacity. A Power of Attorney, Health Care Proxy, and Revocable Trust allow you to appoint trusted individuals to manage your finances and make medical decisions if you become incapacitated. Without proper planning, your loved ones may face costly and intrusive court proceedings to manage your financial and medical affairs.
3. Manage Inheritances
Leaving an inheritance to a child or grandchild outright can be risky if they are young and lack financial savvy or maturity. Estate planning provides you with the opportunity to protect your beneficiary’s inheritance by holding the assets in trust until they reach a certain age. This type of trust planning is ideal for minors or young adults needing financial guidance. This type of trust planning may also be advisable for blended families who wish to provide for a surviving spouse while also protecting their biological children.
4. Asset Protection for Beneficiaries
Estate planning with an asset protection trust can safeguard your child’s inheritance from divorce or creditors, ensuring that their inheritance is protected and preserved for years to come. While protecting the inheritance, distributions can be made to cover expenses such as education and healthcare. This planning provides protection and flexibility and is particularly important for adult children in high-risk professions and children in unstable marriages. Consider this type of trust planning if:
Your child is a business owner.
Your child is vulnerable to financial manipulation by others.
Your child’s marriage is unstable.
You have a child with unique circumstances or disabilities.
5. Minimize or Eliminate Estate Taxes
While the federal estate tax exemption will be $15 million beginning in 2026, Massachusetts has a much lower exemption of $2 million. Individuals often reach this threshold without realizing it, especially when life insurance, retirement accounts, and real estate are factored in. Estate planning with estate tax minimization techniques can help you reduce your estate tax burden, allowing you to pass more assets to your beneficiaries instead of the government.
6. Avoid Probate
Estate planning can ensure that the probate of your assets after your death is avoided. Avoiding probate can save on estate administration costs, protect your family’s privacy, and ensure the efficient transfer of your assets to your beneficiaries. Probate can be avoided with trust planning and through proper asset titling and beneficiary designations.
7. Appoint Guardians for Your Children
Having an estate plan is important to provide peace of mind for young families and new parents. A will is essential to designate guardians for minor children. Without a valid will, the court will decide who raises your children without your input. This process and the unpredictability of the outcome may lead to family disputes and emotional trauma which can be avoided with proper planning.
We can help
Estate planning is important to ensure your wishes are honored and to providing peace of mind and protection for you and your loved ones. Effective estate planning involves careful considerations about your assets, goals, and family dynamics. Taking the time to create an estate plan that works, rather than just having a set of documents, can make a significant difference in the lives of those you leave behind.
Are you ready to take the next step in securing your family’s future?
Contact Old Colony Law today for a personalized consultation, and let us help you navigate the estate planning process with confidence and clarity. Your legacy deserves thoughtful planning—don’t wait until it’s too late!