If you are a married couple, you won’t owe a single penny in federal estate taxes unless you leave behind an estate worth over $10.5 million. If you are single, your estate will have to pay if you leave behind more than $5.25 million. When many people hear these numbers they think that because the amount is so high, they will never have to create an estate plan.
While it’s true that most people will not have to worry about paying estate taxes, an estate plan serves many other purposes. Here’s why you need an estate plan even if you aren’t a multimillionaire.
Your state already made your inheritance choices for you.
Let’s say you want to leave your prized art collection to one of your children, and to the two others you want to leave a cash gift. While you may have made your wishes clear, that doesn’t mean your property will be divided the way you want it to be. The states of Minnesota and North Dakota both have laws that determine who inherits your property if you don’t create an estate plan. Unless you have a plan in place, your property goes to whom the law says it does.
Your doctors won’t know what kind of care you want.
If you should lose the ability to tell your healthcare providers what kind of treatment you do or don’t want to receive, it will fall to a spouse or other family member to make that decision for you. Unless you are clear about your choices and create an advance medical directive, there is no guarantee you will receive the care you want.