If you die without an estate plan, then it is important for you to understand that there may be costs that your family or friends will have to pay that could have been avoided.
If you don’t have an estate plan, there will be monetary and psychological costs. To start with, you won’t be able to give your wishes on how to distribute your property or how to take care of your children or pets. In fact, your wishes will be irrelevant, because they simply don’t exist on paper.
There are additional costs to be aware of, too.
The hidden costs of lacking an estate plan
Some of the costs that your loved ones may need to deal with include:
- The cost of settling your estate through probate
- Higher tax liability
- Creditors and collections
- Bond if a court-appointed guardian takes over custody of your children
- The cost of raising children without a trust or additional financial support
It is important to work on your estate plan because doing so is the best way to make sure your tax liabilities are limited and that your guardianship documents are established. You may also want to set up trust funds and take steps to reduce the likelihood that your estate will enter into probate.
It’s hard to manage an estate without any guidance
Psychologically, it is tough to deal with someone’s estate when you don’t know what their wishes are. Your family may be grieving, and on top of that, they’ll need to hire legal support and have to handle the expenses related to your death on their own until probate is finalized.
You can help your family get through a difficult time in their lives
It’s not a good idea to leave your estate to chance. It’s easier to prepare for possible incapacity and to plan your estate plan in advance so that you can focus on enjoying your life knowing that your loved ones won’t have to deal with serious financial issues or the tedious probate process when you pass away. It only takes a small amount of information and time to get started on your estate plan.