The Importance of Knowing Estate Planning Basics: A Newburgh, IN Guide

When the legendary Minneapolis musician, Prince, died unexpectedly in 2016, he passed without leaving a will. Without any kind of estate plan, his siblings faced a legal nightmare. For example, a man who was in prison falsely claimed to be the musician's secret son.

According to The Law Office of Antoinette Bone, Prince's family faced a staggering $45 million in legal fees. The Prince estate's legal headaches highlight the importance of estate planning.

Prince's lack of foresight caused years of stress and hardship for his family. The only way to secure your assets and avoid family disputes after your passing is to have a clear estate plan.

Interested in learning what legal estate planning is and how it works? Read on to learn some useful estate planning tips.

What Is Estate Planning?

Usually, when people pass away, they want to leave their assets to their families. Estate planning is the legal process where you formally declare these intentions. Through proper legal estate planning, you'll ensure:

Your assets are passed on to the people you choose
Your surviving family will face less of a tax burden on their inheritance
There won't be disputes in your family over who gets what
Your family will avoid lengthy legal battles
Any dependents like children are cared for according to your wishes
That your medical wishes are followed if you're incapacitated

As you can see, you don't need to be rich for your family to benefit from your future planning and estate protection. If you own property, have children, or want to maintain control over medical decisions, estate protection is non-negotiable.

Don't Risk Leaving People Out

It's not uncommon for people to be left out of wills unintentionally, particularly after a sudden, unexpected passing. An example of this involves the actor Heath Ledger. According to the Law Offices of DuPont and Blumenstiel, after he passed, it emerged that he didn't leave his daughter anything. It wasn't deliberate; he simply hadn't updated his estate plan after the birth of his daughter.

Thankfully, Ledger's daughter received the assets she deserved after a public outcry. If you're not a high-profile celebrity, any family you leave off your will probably won't be so lucky. Tragically, some people are accidentally forgotten in estate plans and live the rest of their lives thinking the omission was deliberate.

The only way to be sure no one is left out is to have a legally binding estate plan.

What is a Will?

A will is a crucial part of any estate plan, as it outlines how your assets will be split among your loved ones. Essentially, it's a legal expression of your wishes, and you'll select an executor who ensures your decisions are carried out. Without this legally binding proof of what you wanted, your family will be left guessing.

Without a will, disputes over the division of assets are common, even in families with no history of conflict. Even if everyone wants to divide your assets fairly, without a will, you risk disputes over the very definition of 'fair'. Secure your family's future with a well-planned will.

Make sure you comply with Indiana's specific requirements for wills, such as the need for 2 witnesses.

What Is A Trust?

If you're lucky, you're leaving a sizable sum to your grandkids or other young relatives. That inheritance could be a life-changing amount of cash, so you can't trust a teenager with the full amount.

Immaturity and poor decision-making can squander millions staggeringly quickly. Just look at lottery winner Evelyn Adams. According to Unilad, she was left nearly penniless despite winning the New Jersey Lottery two years in a row.

But there's good news. You can set up a trust, which is like a will that your loved ones can only access in certain circumstances, for example when they turn a certain age.

Trusts also have various other advantages such as:

Assets in trusts are protected from creditors and lawsuits
Trusts can significantly reduce estate taxes
Assets held in a trust can usually skip the lengthy probate process

If you want to ensure your beneficiaries choose wisely or protect them from tax burdens, you should discuss trusts with an estate planning attorney.

How Does Power of Attorney Protect Your Interests?

Power of attorney involves designating someone you trust to make decisions for you if you can't make them yourself. This can be invaluable for people with memory-related impairments, such as those who have Alzheimer's. These conditions make it difficult to alter wills and trusts, as they're considered invalid if they were written by someone cognitively impaired.

The solution is to grant power of attorney to someone you trust. You're relying on them to manage financial, legal, and even medical matters on your behalf, so it needs to be someone you can count on. Having someone with power of attorney could save your loved ones years of legal trouble, so act now to ensure they're protected.

What Is a Healthcare Directive?

A healthcare directive is a legal document that lays out your preferences for receiving treatment. Naturally, some families prefer not to discuss worst-case scenarios, but if you're left incapacitated and unable to communicate, your family could be uncertain about your preferences.

Don't leave your loved ones responsible for difficult choices; a healthcare directive lays out exactly what you want in black and white. It's the only way to guarantee certainty and clarity in your healthcare decisions.

Your Plan Needs Regular Updates

Over time, your family and circumstances change. Grandkids are born, priorities shift, and assets and wealth fluctuate. It's crucial to keep your estate planning updated to reflect these changes.

Don't risk inadvertently cutting your grandkids off from their inheritance; always keep your estate planning up to date.

Estate Planning Helps Your Loved Ones

Without proper estate planning, you risk throwing your loved one's lives into chaos. To avoid legal issues and bitter feuds, talk to an estate planning attorney and get things in order.

Of course, you won't have much to pass on to the next generation if you're overcharged for your senior living needs. Here at Bell Oaks Place, we believe in providing top-notch senior care that doesn't require dipping into your grandkid's inheritance.