The vast majority of folks are no longer exposed to the federal estate tax, thanks to today’s ultra-generous $11.18 million exemption for singles or effectively $22.36 million for married couples. Great! But being exempt from the federal estate tax is not the end of the story. If you have minor children and some assets (maybe just a car or two and some nice furniture), you probably need an estate plan regardless of your tax situation.
And the truth is, even some rich folks pass on without leaving so much as a will. According to reports, Aretha Franklin (estimated net worth $80 million) died without a will, even though she was in poor health and had a special-needs son. Prince (estimated net worth $200 million) also died without a will, and his heirs have yet to receive any money two years after his death. Don’t let this be you. Here’s what you need to know.
Why you need a will or living trust document
If you die intestate (without a will), the laws of your state determine the fate of your minor children and your assets. Yikes! So unless you have an inordinate amount of faith in your beloved state legislature, you need a written will to make your wishes known.
In addition to a will, you may also want to set up a living trust to avoid probate.