Many people believe that estate planning is only for older people, but waiting to create an estate plan brings many risks with it. What challenges can arise if you pass away without an estate plan in place?
The court will divide your estate according to the law, not your wishes.
If you die without an estate plan in place, the law outlines which loved ones will receive your assets and how much they will receive. This leaves your wishes out of the calculation, and can mean that your loved ones do not receive family heirlooms, savings or other assets you particularly wanted them to receive.
Some of your loved ones might not benefit from your estate.
A lack of an estate plan doesn’t only impact the specific assets your loved ones receive. North Dakota’s intestate succession law focuses on distributing a person’s assets among their spouse and children, with their parents or siblings inheriting if they do not have a spouse or children. This means that friends, relatives outside your immediate family, stepchildren and other loved ones are left out of your estate if you do not outline a plan.
If you have loved ones with special needs, their benefits might be at risk.
When your loved ones rely on government benefits, they must meet strict income and asset limits to continue that eligibility. Receiving a large sum of money outright could jeopardize those benefits, while a carefully planned trust can protect those benefits and provide for your loved one.
Important healthcare decisions might come into question.
Estate plans do not only involve plans for a person’s death. They can also outline your wishes and name someone to manage your finances or make healthcare decisions on your behalf if you become incapacitated as a result of illness, injury or old age. Without a plan, your care might not align with your wishes.
While none of us knows for sure what the future brings, creating an estate plan is one way to avoid these risks and provide for your loved ones no matter what happens in the years to come.