The consequences of not planning can be expensive financially, emotionally, and personally.
So many people avoid estate planning for one reason or another.
Before you decide against planning or to delay planning, you need to understand the consequences of not having a plan …
The State of Arkansas Takes Over
A Judge Makes Your Decisions
At the times when you are not able to make your own decisions a Judge, who probably doesn’t know you, can decide who makes your decisions.
Incapacity
Your spouse does not get to just take over your personal, legal, and financial affairs.
If, when, you become incapacitated, a Judge that probably does not know you or is familiar with your circumstances makes the decisions. The Judge decides who will manage your legal, financial, medical, and personal affairs.
This process, known as guardianship, is expensive on your family in money, time, and emotions. Family often fights over who should be in charge, leading to more money and time being spent.
Even if everybody agrees, the expense could easily be more than the cost of creating a proper estate plan in the first place.
In short, a Judge will rip your rights away and give them to somebody else to manage.
Intestacy
Intestacy basically means without a Last Will and Testament.
If you don’t have a plan for your assets, that is you are intestate, the State will take over.
In fact, the State of Arkansas already has a plan for your assets. That plan is called “intestacy.” In Intestacy, the State has already decided who gets what, how much, and when.
Intestacy takes place in Probate Court before a Judge who probably doesn’t know you or your situation.
Distribution of Assets
Your spouse does not automatically get everything!
When you are intestate, that is without a Last Will and Testament, the State has already decided who gets how much.
Your spouse is only entitled to 1/3rd of the money and 1/3rd of the real estate. Worse, your spouse doesn’t get the 1/3rd of the real estate outright, but in what is called a “life estate.” The life estate means they can live there and have to maintain the home, but can’t sell it without permission of all of the other heirs (your children).
Your children get the other 2/3rds outright.
And, the process will take 3 months to years to finish. During that time, the money is not available to people who may desperately need it.
You Spend Too Much Money
Conservatively, a guardianship costs $1,500 without including fees and expenses.
Intestate proceedings are around $4,000 without fees and expenses.
Expect this to get more expensive every year.
You’ve already spent $5,500 plus an unknown amount on fees and expenses.
$5,500 is almost double what a Trust based estate plan that avoids probate costs up front.
The other downside of a Last Will and Testament is that it must pay off your debts and final expenses. That is even more money spent. A Trust does not have to pay off your final debts. More money saved!
What Can I Do?
If you decide you want you and your family to avoid these expenses and hassles, then you need to take steps to avoid guardianships and probate. The best way to do that is to create an appropriate estate plan. An estate plan that protects you, your family, and your money.
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from DeWitt Law Firm, PLLC
