If you own a couple of properties or inherited a couple, you might have heard the term ‘estate planning.’ Essentially, estate planning is a set of plans to manage and distribute your properties after your passing. Many property owners do this to protect their interests, while many more do it to keep their families financially secure for years to come. However, the reality is that not many people do it early. More than half of the U.S. population who have properties in their name do not have wills or have done estate planning. But why is it essential for people to do this? When is the right time to do it? What are the legal implementations if there is no will?
Why do Estate Planning?
Estate planning is important because it will essentially look over your properties once you’ve passed. This will include the maintenance of such properties and how they will generate revenue. It can also have plans for each of the property’s growth. Properties of the deceased are limited to real estate properties and assets like vehicles, pieces of art, stocks, life insurance, and more.
Ultimately, estate planning is known for its second primary function and that is the distribution of properties. Without estate planning, these properties can be distributed unevenly. In a worst-case scenario, properties are given back to the government or entities used to own them before their purchase.
Ultimately, estate planning is important for anyone who has earned some properties throughout their life span. However, if you want to do it now, you must consult an estate planning lawyer. These kinds of lawyers specialize in the creation of wills and the management of assets. Furthermore, they can also give you financial advice. By having this connection, you can start estate planning at any time. But when is the optimal time to do it?
When is the Right Time?
It is yet unknown when is the right time to do estate planning, but financial experts believe that you should do it once you’ve earned two or more properties under your name. There is no right age for this as various individuals earn properties during different times of their career. Additionally, experts believe that if you’re having problems about your family’s future once you’re gone, then you should definitely do estate planning.
Estate planning has other purposes aside from the primary and secondary functions we have indicated above. It can help you manage the monetary funds (i.e., investments) of today and translate them to properties that your family can own in the future. It can also be as simple as managing a business of yours once you’ve passed away.
What Happens if There is No Will?
The will is an important legal document that will dictate your plans regarding your property once you’ve passed away. Essentially, it is the accumulation of your estate plans. Unfortunately, the lack of estate planning and a will has led to countless lawsuits and family feuds regarding the inheritances of deceased individuals. This can lead to the discrepancy of wealth among family members and the eventual dissolution of some properties.
This can be problematic if your family relies mainly on these properties as their source of health. So how does the law handle the distribution of properties once there is no will? There are two major types of inheritance laws, namely community property, and common law is followed.
Community Property
Essentially, community property dictates that the deceased spouse immediately owns half of the property of the deceased unless a will dictates otherwise. In this situation, since there is no will, the state follows the community property law to distribute the properties. That said, the spouse is free to do whatever they want with the property they own. The other half will then be distributed to remaining family members as the state sees fit. This can be specifically found in New Mexico, California, Idaho, Nevada, Texas, Washington, and Wisconsin.
Common Law
Common law, on the other hand, does not give the properties directly to the spouse. Instead, it is determined by the income of the spouse who purchased it. If the living spouse has purchased it with their income, then the property is given to them. If the deceased property purchased it with their income, they own it instead. If there is no will to distribute the properties owned by the deceased, each property can then be purchased by surviving family members. Common law is found in the remaining states not mentioned above.
Ultimately, you need to write your will to avoid these legal troubles in your family. It will help your family move on with their lives without having financial troubles in the future. Write down your will as early as you can and revise them the more properties you gain throughout your life.
