Estate Planning Doesn’t Have to be Scary

While estate planning isn’t always a fun topic of conversation, that doesn’t mean it has to be scary or spooky, like the haunted houses or horror movies that are around this time of year. It is definitely a lot scarier to become incapacitated or die without a comprehensive estate plan in place!

When you pass away without a Last Will and Testament, the laws of the state specify who is to inherit your estate upon your death. The thought of having your estate pass to someone you did not designate is frightening! One of the crucial components of the estate plan is designating where you want your estate to pass upon your death. Further, you can appropriately plan for the inheritance, including specifying guidelines for minor children or children with personal problems. Planning provides you with peace of mind that your assets will be distributed according to your wishes upon your death.

Probate is considered a scary word! Probate is a court supervised proceeding where a person’s Last Will and Testament is enforced and administered at the time of death. Probate is required for a person who dies without a Last Will and Testament. Since it is a court supervised process, it can be quite expensive (up to 6% of the estate value in Arkansas) and time consuming (minimum of 6 months in Arkansas). For these reasons, probate should be avoided if possible. A good estate plan often focuses on probate avoidance.

The thought of attorneys’ fees might be something that spooks you this Halloween. However, attorneys’ fees upon your death are typically much less expensive when a good plan is in place. The best probate avoidance plan is the use of a Revocable Living Trust. Trusts are the most popular estate planning document primarily because they avoid probate while at the same time thoroughly addressing all issues that can come up in administering an estate at death. A Trust is simply an agreement that controls your assets while you are alive (with you serving as your own Trustee and remaining in full control), but also controls the distribution of your assets at death (much like your Will would). Trusts are often called Will substitutes as they replace the function of a typical Will.

One way to make estate planning less scary, is to have a trusted advisor to discuss it with. It is much easier to discuss difficult (or scary!) topics with someone you feel you can trust. I always recommend having trusted advisors in your corner, including attorneys, financial advisors and CPAs. These advisors can appropriately guide you to what type of planning might be best for you and your family.

Tiffany Tucker is an associate attorney at Farrar & Williams, PLLC and can be contacted at 501-525-4401 or by email at tiffany@farrarwilliams.com. She can answer any questions you have about this subject.