Heir Hunters, a Netflix show that I've been watching, follows 30 research companies in the United Kingdom as they scramble to find surviving heirs when someone dies without a will. If the heirs can be found, the research firms are paid a fee. It's a lucrative business in the UK, where, according to the show's data, about two-thirds of Britons die without a will.
Sometimes it takes a catastrophe to remind us of the fragility of life and the importance of putting safeguards in place to protect what we value most.
One of the most effective methods to combat this is to take the somewhat uncomfortable step of making adequate planning for whatever may occur. Just as you'd want to have emergency preparations in place for your home in the event of a calamity, it's critical to have plans in place for our loved ones and most valuable assets (children, spouse, home, finances).
You might be wondering, "What is estate planning?" This is an excellent question to investigate and build a strategy for. In fact, there are at least six reasons why every one of my Charlotte customers should have an estate plan in place this year...
“There is greatness in doing something you hate for the sake of someone you love.” – Shmuley Boteach
1) Capacity reduction. What if you become unable to manage your own affairs due to incompetence? If you don't have a plan, the courts will choose someone to manage your affairs. You choose that individual with a plan (through a power of attorney).
2) Children who are minors. If you die, who will raise your children? A court will make that decision if there isn't a plan in place. You can name the guardian of your choice if you have a plan.
3) Families that are made up of two or more people. What if your family is made up of people from different marriages? Children from different marriages may not be treated as you would like if you don't have a plan. You can decide what goes to your present spouse and any children from previous marriages or marriages if you make a plan.
4) Maintaining family assets. Would you wish to keep your assets in your immediate family? If your child dies young and you don't have a plan in place, your money may end up in the hands of your child's spouse. If your child divorces his or her existing husband, the spouse could inherit half of your assets. You can create a trust with a plan to ensure that your assets continue in your family and, for example, pass to your grandkids.
5) Accounts for retirement. Do you have a 401(k) or other type of retirement account? Your chosen beneficiary for retirement account funds may not reflect your current preferences if you don't have a plan in place, which could result in costly tax ramifications for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). You can choose the best beneficiary using a plan.
6) Probate avoidance. Without a plan, your estate may face delays and additional penalties (depending on the state), and your assets may become public knowledge. You can structure things such that probate is completely avoided with a strategy.
I hope you give this some thought. I'm also happy to make a referral for an excellent estate planning solution if you need one. Simply send me an email using the email link in the upper right corner of this website.
Most importantly, I appreciate your trust and referrals.
Warmly,
Sara F Gonzalez
(704) 599-3355
Kohari & Gonzalez PLLC