Death and taxes. This cliché is as true today as it ever has been. Yet, according to the AARP1, only about 40% of us have made plans for when we pass on. The top reason Americans give for not having a will? They haven’t gotten around to it yet. While this is understandable, you should be aware that if you die without a will, your loved ones will likely suffer the consequences.
Protect Your Loved Ones
First, when you die without a will in the state of Arizona (Intestacy), a judge will make all the decisions about your assets regardless of your wishes. In all likelihood, your assets will be auctioned or sold to pay off your creditors. In some situations, creditors may even be able to go after your spouse or your children’s assets to pay for your debts. Funeral costs can be extremely expensive and you can be sure that a funeral director’s first move is to get as much as your remaining assets as possible to pay for that solid cherry wood casket.
Preserve Family Relationships
Next, even the part of your assets that remain in your loved ones’ possession may create significant hardship if they are not carefully distributed. The death of a loved one should have a unifying effect and should be a time for love and reflection. However, if your will is not set out clearly, your loved ones may be tempted to fight over your assets. In my experience, this has unnecessarily torn many families apart.
A Personal Story:
I once met with a son whose dad had just passed away. He explained to me that while his dad had a will, it stated that his gun collection should be distributed “equally” among his children. Unfortunately, because this will was poorly written, the children had been fighting for years over the meaning of the word “equally.” As most gun owners know, each firearm in a collection is unique and distributing them equally is not just a matter of dividing the amount of guns in equal amounts. Fortunately, in this case we were able to find a good solution. However, most stories do not end so well when careful estate planning is omitted.
Avoid a Tax Burden
Finally, when your loved ones receive an inheritance, they may be liable to pay taxes on this gift. In some cases, the family member or loved one may not even be able to afford receiving his or her inheritance because he or she cannot pay the tax burden attached to the item. The current administration has promised to curtail the “death tax” but as of when this article was written, there are still tax ramifications attached to inheritances. With careful planning, those tax ramifications can be avoided altogether.
Save Time & Avoid Stress
A basic will is not very expensive anymore. It can save you and your loved ones money, anxiety, and time. When you are planning for your family’s future, step number one should be a basic will. While a will is not the only thing you need to protect your assets, it is the first and most important step you should take in estate planning. Speak to one of our attorneys today to make sure that your will reflects your needs accurately.Call Us Today
Six Reasons Why you need Estate Planning:
- Make your own choices and avoid Probate
- Protect your family's well-being by protecting your assets
- Preserve family relationships and avoid uncertainty
- Avoid a tax burden on your loved ones
- Save time and be prepared by taking care of things in advance
- Avoid undue stress on spouse and children during difficult times