More than half of all adults do not have wills. There are several reasons an estate plan may be important for people in Connecticut even if they have few assets. While there are template documents available, it is typically better to work with an attorney to create an estate plan and choose the right strategies for the estate.
Reducing or avoiding probate fees and taxes is one reason to create an estate plan. Asset protection is another reason. For example, a person might purchase additional insurance to cover assets in case of an automobile accident. A person might also want to know how assets can be protected from the need to spend them down in order to qualify for Medicaid.
Choosing how assets will be distributed after a person’s death is one of the main reasons to create an estate plan. Keeping family dynamics in mind, a person can use a will, a trust or other documents to specify who will receive which assets and when.
When working with an attorney, a person might want to discuss whether a will or a trust would best suit their particular situation. Some people might assume that a trust is just for wealthy families, but there are other situations in which a trust can be useful such as controlling how assets will be distributed to irresponsible loved ones. People may also want to consider how beneficiary designations fit into the overall plan, such as those used for insurance policies and retirement accounts. Choosing people to assume financial and medical responsibility in case a person becomes incapacitated is another important aspect of estate planning. It is also critical to remember that an estate plan needs to be reviewed regularly and updated according to changes in tax laws, a person’s assets and a person’s family situation.