If you are like many United Kingdom residents, you think that only wealthy people need estate plans. Unfortunately, this common misconception puts many families in untenable situations when a loved one dies. It can also cause major problems when a loved one cannot communicate his or her wishes with regard to medical care because of injury or illness, but no one really knows what (s)he wants or does not want.
As FindLaw explains, this is why virtually everyone needs a good estate plan and why estate planning is so important.
Estate plan inclusions
If you think your estate plan requires only that you sign a Last Will and Testament, think again. Your will is only the tip of your estate planning iceberg. Depending on your situation and your preferences, your estate plan could include some or all of the following in addition to your will:
- Your life insurance policies
- One or more trusts
- One or more school tuition plans
- A durable financial power of attorney
- A health care directive, a/k/a durable medical power of attorney
Estate planning benefits
A well thought out estate plan lets you express your wishes ahead of the time they need to be known rather than leaving your loved ones in a quandary once you become ill, incapacitated or pass away. In addition, you can construct your estate plan so as to receive substantial tax and other benefits. Finally, your estate plan can evolve over time as your wants and needs change. Other than irrevocable trusts, you can always change, modify or even rescind all your estate planning documents.
Disadvantages of having no estate plan
If you do not construct an estate plan during your lifetime, you run the risk of your family members fighting with each other when you die. Such family wars often irreparably damage relationships and tear your family apart.
Then there is the matter of intestacy. If you die without having made a will, United Kingdom law determines who gets your property and assets, as well as in what proportions, regardless of what you likely wished to have happen.
With regard to your children, should you and your spouse or partner die in the same car crash or other catastrophic event while your children are young, they could be placed in the care of someone who you most definitely would not want to raise them.
For these and many additional reasons, you need to start constructing an estate plan regardless of how much material wealth you may or may not have.
This is general educational information and not intended to provide legal advice.
