There are far too many people who fail to understand the importance of estate planning. If you go through life without making any plans for something that will definitely happen, negative consequences can result, and your family members will pay the price.
Let’s look at some of the negative consequences that can come about due to estate planning inaction.
Inappropriate Asset Distributions
If you do not have an estate plan in place, the state would use intestate succession laws to distribute your probate property. Ultimately, people that you love could be left out in the cold, and there could be inequitable distributions among inheritors.
Letting the chips fall as they may as the government takes control is not a very good idea if you want to provide for all of your loved ones in a responsible manner.
Long-Term Care Costs
A proper estate plan will also address end-of-life issues. The majority of senior citizens will require living assistance eventually, and Medicare does not pay for long-term care.
If you do nothing to prepare for this contingency, all of your resources could wind up going to a nursing home. This can be prevented with the proper planning.
Loss of Control
While it is not the most pleasant subject to contemplate, many elders become unable to make sound decisions late in their lives. In fact, approximately 45 percent of people who are at least 85 are suffering from Alzheimer’s disease, and this is not the only underlying cause of incapacity among elders.
The state could appoint a guardian to manage your affairs in the event of your incapacitation, and you would have no control over the state’s decision at that point. To prevent this, you could be proactive about the implementation of an incapacity plan.
This will typically involve the execution of legal documents called durable powers of attorney. With these documents, you name hand-picked decision-makers who would be empowered to act on your behalf if you were to become incapacitated at some point in time.
Death taxes can significantly erode your financial legacy. There is a federal estate tax, and there is also a state-level estate tax in New York.
If you are a high net worth individual, and you fail to implement tax efficiency strategies, a significant percentage of your wealth could be absorbed by taxation.
We have looked at some of the consequences of inaction in this blog post, but there are others. There is really no reason to proceed without a plan. If you are ready to take action for the benefit of your loved ones, we would be glad to assist you.
Our firm offers no obligation consultations, and you can send us a message through this page to set up an appointment: Long Island NY Estate Planning Attorneys.