I'm So Broke I don't Even Have an Estate to Plan!
Surely you know the importance of naming temporary and permanent guardians and giving them the legal authority to act through a trust. In this article we’ll address a regular objection I hear. “Lisa, I don’t have a pot to pee in. Why would I need to do Estate Planning?”
Estate Planning is not just for the wealthy. Maybe you’ll never win the lottery. You could still inherit a large sum of money at some point in your life. What if you win a lawsuit at some point and receive a monetary reward for damages? Inheritances and monetary rewards can invite opportunists. Trust-based Estate Planning can minimize the threat of opportunists.
If you're a business owner, certainly you anticipate that your business will grow and therefore, so will your wealth. My point is, even if a client is not wealthy or does not have a large estate, does not mean that their estate won’t grow. And, even if it never grows, it doesn’t mean that there is no need to engage in Estate Planning.
It takes very few assets for an estate to land in probate court. In some cases, less than $50,000 in total assets will set the probate process in motion. As you know, the probate process is lengthy, grueling and ties up your assets so that loved ones cannot access them.
If you have children, the fact that your assets cannot be accessed during the probate process should be a huge concern. At minimum, clients may want to consider life insurance to ensure their family has funds to provide for them while the estate is being probated.
That said, relying on life insurance may not be enough. Imagine if you died and your children inherited a $500,000 life insurance policy at age 18. Consider whether a wind-fall would derail your child's future. I've seen the scenario play out in real life. There was a young man whose father passed away. When he turned 18 he received insurance proceeds outright. The young man moved from Minnesota to Miami and became involved in the party scene. Several years later, he died of a heroin overdose never having had a career or receiving an education. Had his father established a trust and designated ages and stages for his son to receive the life insurance proceeds, that young man would likely be alive today.
Establishing a trust would keep your assets out of probate and allow your family to access them immediately upon your death, yet place conditions on distributions to protect loved ones from destructive behavior.
For some clients, a major concern is that probate is public. As you know, this means that when you die all of your debts will become public information. If this makes you uncomfortable, you're a good candidate for Trust-based Estate Planning.
You’ve learned that monetary rewards from lawsuits, inheritances and growth in business can quickly increase the value of one’s estate. You also learned that even if your estate is as small as 50,000.00, it will likely be probated when you die resulting in your funds being tied up and unavailable to your family. Finally, you now realize that a Trust-based Estate Plan can easily protect your growing estate and allow you to properly provide for your family in the event of your death.
To set up your Trust-based Estate Plan, call Minneapolis-based Metropolitan Law Group PA at (612) 524-9414 to meet with Attorney Lisa Haster. Lisa is the founder of Twin Cities’ Metropolitan Law Group PA, JDsync syncing attorneys with support virtually and is a best-selling author.