A lot of Americans feel that estate planning is only something that rich people need do. While it is true that estate planning becomes more vital when you have more assets to organize and divvy up, to say that low and middle income California residents cannot benefit from an estate plan is simply not true. This article will discuss how less affluent people can also benefit from an estate plan.
First, no one wants to leave a big mess for their heirs to try and sort out. Without having an estate plan, though, it is likely that the estate will go to probate court. In probate court, your potential heirs and family members may be pitted against one another in costly and time-consuming legal proceedings. An appropriately drafted will still needs to go through probate, but if you have indicated how your assets shall be divided in your will, then everything will be much easier and clearer for the courts and your family to handle and resolve.
Second, even low and middle income individuals have assets and these should be accounted for in your estate plan. Those might include an IRA account, a checking account, a savings account or an investment account. Your checking account might have less than $3,000 in it, but this account should still be referenced in your will. You might also have some special pieces of art or jewelry that have sentimental value for your family. These items should also be itemized, and it should be indicated who will receive them in order to avoid the threat of family disagreements and arguments.
Third, no estate plan is complete without the creation of powers of attorney for the estate planners medical and financial affairs. Even if your bank account is at zero, financial and health care powers of attorney are very necessary because you want to have someone you can trust to manage your health care and assets in the event that you are suddenly and unexpectedly incapacitated.
Source: Nerd Wallet, "Estate Planning Is for Everyone, Not Just the Rich," Nov. 16, 2015