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Why Estate Planning is More Important Than Ever

There are many competing perspectives on estate planning; some people recognize the importance, while others believe that they would not benefit from crafting one. If you have not started on an estate plan for you and your family, understand that you are certainly not alone. In fact, you are in the majority. We understand it can be uncomfortable to consider your own mortality and how it might affect your loved ones. 

Another reason why many people do not have any estate-planning documents is because they believe that estate plans are only for the rich and elderly. The fact is that any adult – yes, even you! – can benefit from having an estate plan in place. Current events have shown us that everyone’s day-to-day routines and livelihoods can quickly and dramatically change. When life is turned upside down, the important things (like your children, spouse, and loved ones) tend to come into focus. 

Wills

The Last Will and Testament (more commonly referred to as Wills) is probably the best-known estate planning document, and for good reason: the foundation of almost any estate plan is set with this form. A Will has many possible uses; it can:

  • Appoint a personal representative, formally referred to as an “executor,” to carry out the instructions you leave in your Will and tie up all loose ends
  • Describe how and to whom you wish to distribute assets from your estate
  • Name guardians for your minor children if something were to happen to both you and your partner

Trusts

For people with fairly high net-worth estates, a trust can be a very important estate-planning tool. A trust is a legal document that sets up one place where the trustor can place multiple assets. While the trustor (creator of the trust) is still alive, he or she retains control over the items in the trust, acting as both the trustor and trustee. The trustor (sometimes called the “grantor”) also appoints a successor trustee who distributes the assets in the trust to the beneficiaries as desired by the trustor. One benefit of trusts is that you can avoid the federal estate tax if it applies. 

Avoiding Probate Court

If you pass away without an estate plan, then your estate will most likely need to be settled through the Tennessee probate court system. This can be a long, expensive, and stressful process for your loved ones. Additionally, you risk having your assets distributed to individuals whom you would not want to receive them. One advantage of having a Will or trust (or both) is that you greatly reduce the time spent in probate court. 

Conclusion

The best time to start on your estate plan is right now, while you are of sound mind and body. You never know what tomorrow might bring, which is why you need a plan today. The Knoxville Bar Association would be glad to connect you with an estate-planning attorney; reach out to us soon to get the process started!

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