In a recession, the last thing you want is money being wasted on unnecessary, avoidable costs. But this is exactly what will happen if you do not protect your family and loved ones by setting up an estate plan. On your long list of expenses, an estate plan should be near the top of the list. In a shaky economy where people are worried about their future, an estate plan brings security and peace of mind that your loved ones are protected should anything happen to you. Without a proper estate plan in place, your estate may have to pay for the high costs of probate proceedings and attorney’s fees. This means less money or even no money for your loved ones. And in the situation where your estate has no money, your heirs will have to bear the high costs of wrapping up your estate.

While a will may be sufficient for some people, a proper estate plan may need more than just a will. Along with the will, a durable power of attorney is an instrument that will allow you to appoint someone to make financial decisions for you should you become incapacitated. Moreover, an advanced healthcare directive allows you to appoint someone to carry out your health wishes. Planning ahead and designating someone will negate the need for court supervision, therefore, saving unnecessary court costs. In addition to the will, durable power of attorney and advanced healthcare directive, a living trust may be needed. For example, a home worth $100,000 or more will subject your estate to the full probate process. The high costs of probate may be reduced by having a will in place, but having a living trust will avoid probate altogether.

Probate costs and attorney’s fees will be taken out of your estate. This is money you hoped to pass on to your loved ones. As previously mentioned, if your estate does not have money or not enough, your loved ones will be burdened with thousands and thousands of dollars in court costs and attorney’s fees on top of all the other expenses. Rather than receiving any money, your loved ones may have to pay money. In a time where people are trying to save money and find ways to cut their losses, you should protect them from such risks. This kind of mess is the absolute last thing you would want to leave behind in a recession period. People during a recession have enough to worry about. Money is precious but so is time. This is time that can be spent dealing with other difficulties involved in a recession.

It is undeniable that there are only positive aspects to having a proper estate plan in place. These benefits are even more important during a recession period where money is tight and future uncertain. By making the choice to forgo an estate plan and save the money you would have spent on an estate plan, you are not really saving money at all. Compared to probate proceedings, setting up an estate plan is relatively inexpensive. However, if costs ranging from 1200 – 3000 is too much for you to afford right now, you can pick up an estate planning book and create an estate plan on your own. It is better than not doing anything. It is not enough to simply hope that things will work out on their own. Instead, plan ahead and make sure that things will work out according to your wishes.

Contributions from Joyce Park, attorney at law