While we have been talking about estate planning tools for a long time, we haven’t addressed the difference between what is necessary and what is unnecessary in estate planning. Estate planning tools come in a wide variety of shapes and sizes, and not every tool is right for everyone in every situation. When you create an estate plan, how can you know if the tool is right for you? How can you determine if one of the tools you’re considering is unnecessary?
Optional: Estate Planning
Estate planning by itself is not a legal necessity. No law compels anyone to create an estate plan. Choosing to create an estate plan is entirely optional. While we recommend every capable adult have a good estate plan in place, you are not legally obligated to create one.
The creation of an estate plan is not legally necessary, but it is beneficial. The benefits your plan provides will depend on the tools you create. Depending on your circumstances, wishes and current situation, some tools may be well suited to your needs, while others might not. It is the tools that are not well suited to your needs that we consider unnecessary and should not be included in your plan.
Unnecessary in Estate Planning
So what is unnecessary when it comes to estate planning? What tools do you not need to include in your plan? The answer to these questions will differ depending on a number of factors. Let’s say you are a young single adult without children and without much property. Your estate plan might include a last will and testament, but it will look much different than one created for a married person with children or significant assets. Because you don’t have children you won’t need to make provisions for the appointment of a guardian.
Similarly, because you don’t have much property, you won’t need to address estate tax issues. If, however, you have a great deal of property, you might need a plan that reduces or eliminates estate tax liability.
Determining what is necessary, unnecessary, and optional in estate planning is often a matter of determining what you need, what you want, and what the law allows. The best way to know is to speak to your estate planning attorney, review your options, and make choices that best fit your needs.