The question of whether there are any unnecessary estate planning tools is one we have not directly addressed before in this blog. As with other estate planning questions, the answer to whether or not any tool is unnecessary will depend upon your particular needs and circumstances. Having said that, there are some essential issues you need to understand about what may, and may not, be considered unnecessary estate planning tools. Let’s take a closer look at this issue to better understand why you may not need all the estate planning tools you might think you do.
Legally Required and Legally Beneficial
The first issue you need to understand about unnecessary estate planning tools is that no estate planning device is ever truly necessary. That is to say, that no one is ever under any kind of legal obligation to create an estate plan, or any specific estate planning tool. The choice to create an estate plan is always yours, and should you choose to craft such a plan, you get to decide what tools you will or will not include.
On the other hand, should you choose to create an estate plan, some tools will be of benefit to you while others may not be. Those that are not of benefit, or are of very limited benefit, are usually what we are talking about when we consider unnecessary estate planning tools.
Unnecessary Estate Planning Tools and Your Plan
As we have said before, no to estate plans are ever truly identical. Each plan reflects the individual needs, wishes, and circumstances of the person creating it. Because those circumstances often differ so drastically, so too will the estate plan developed for each person.
Let’s take, for example, two people: a young adult just getting out of college, and a middle-aged parent with two young children. For the young adult there is no need to create estate planning tools that will protect child inheritances, make provisions for limiting estate tax exposure, or which address many other issues that most young people don’t have to think about.
On the other hand, a middle-aged parent with two young children will likely have to address many issues surrounding the children, as well as other issues involving finances, inheritances, and perhaps tax issues as well.
So, while a specific estate planning tool may be appropriate for either of these people, it may not be appropriate for both. Further, even if the plans created by both people in our example contain the same estate planning tool, that tool may include very different provisions for each person because of their significantly different needs and circumstances.
In other words, there is no real way few to determine what you do or don’t need when it comes to estate planning until you speak to an attorney about what your options are and what kind of plan you might require.