The certainty that the only certainties in life are death and taxes has existed almost since time immemorial. These certainties are a fundamental part of life and a person should not shy away from these tough issues simply because they are tough. Nobody likes to think that they will die eventually, but it is incumbent upon each and every person to plan for this event. The first and best way to plan for these certainties is by creating an estate plan.

An estate plan is a set of documents that help you plan for those certainties. The phrase “estate plan” sounds like a complicated set of material that only very wealthy people need, but in fact it refers to the documents that almost everyone needs, whether their financial and familial affairs are simple or complex.

All of the documents that comprise an estate plan help people avoid problems that often arise upon death. Many of these are problems that people never think about during life, or which, feeling overwhelmed by the problems, push out of their minds. However, in the absence of an estate plan, these issues will be resolved by the courts and state law. Therefore, a properly-prepared estate plan will let each person decide for himself or herself the best choices for their own families, such as who should care for their minor children, who should receive their property, which charitable organizations should receive a share of their assets, and who should wind up one’s affairs.

State law is indifferent to the individual needs of a decedent and operates to distribute assets regardless of a person’s desires. However, state law only specifies how a person’s assets will be divided when someone dies without a Will. Most people assume that the state gives all of the assets to the surviving spouse, but this is not the case. In Maryland and D.C., the state grants only a portion of the assets – between one-third and one-half – to the surviving spouse. The rest of the estate goes to certain other family members. The state laws do not take into account any personal relationships a person may have. The state laws do not take into consideration a person’s own preferences. A Last Will and Testament is the best line of defense against these indifferent laws. A Will is a legal document that is designed to ensure a relatively easy and simple passing of one’s property from generation to generation. A Will allows a person to direct that their spouse should inherit them, or which child should get the family china, or which organization should receive their support.

A major benefit to properly planning an estate is the naming of the guardian. Many people who have minor children do not think about who would take care of their kids in the event that both parents pass away. However, if such a terrible event were to occur the law requires that the court appoint someone to care for the children. A court’s decision regarding these matters can never be as good as a parent’s own choice. We have all heard stories of “wards of the state”. A Will allows a couple to make this fundamental decision themselves without interference from a judge who can never know your children and their needs as you do.

Like all states, Maryland and D.C. have laws that specify who may wind up the personal affairs of someone who has died. This position is commonly referred to as the “executor”. Maryland and D.C. lawmakers have created a very expansive list of people who may be appointed executor, including even the decedent’s creditors. This may well mean that the interests of the executor are at odds with the interests of the family. Moreover, even when a creditor is not named as executor, the court will often appoint one sibling to serve as executor, obviously to the exclusion of the other siblings. A fight will then often ensue within the family, with each member of the family claiming that they did not receive a fair share of the inheritance or that they should have received grandma’s jewelry. With a Will, one can avoid this scenario by appointing someone to serve as executor who will be fair and honest. A person can choose anyone they want to fill this position, thereby reducing the chances of potentially ugly post-death battles.

Creating a Will also allows those individuals whose net worth exceeds one million dollars to properly plan for the taxation that will be due upon the individual’s death. Generally, the federal government taxes the value of a person’s property that exceeds five million dollars, an amount that is scheduled to significantly decrease at the end of 2012. However, both Maryland and D.C. impose a tax on property worth more than one million dollars, inclusive of retirement savings and life insurance policies. While a thorough treatment of estate tax planning is beyond the scope of this article, it is worth noting that consulting a knowledgeable estate planning professional can greatly reduce the potential tax burden.

Estate planning also means planning for your last illness. An advanced directive on health care explains the sort of healthcare treatment that you would like to receive before your death. There is a great deal of variation in how we choose to make decisions at the end of our lives, and an advance directive on healthcare can give voice to our own preferences.

Finally, a proper estate plan includes a document that authorizes a family member or a trusted friend to care for you and oversee your finances if you are no longer able to care for yourself. A person should always have the ability to determine what type of care they receive. Without these documents, a person runs the risk of having these decisions made for him or her, and not necessarily in accordance with his or her wishes.

A Will provides the best means to ensure that one passes their hard-earned wealth to their descendants with a minimum of cost, both emotional and fiscal. A Will appoints a guardian for one’s minor children if both parents die, it can specify how to divide up property, and it can help avoid any taxes that may be due upon death. An advanced directive and durable power of attorney effectuate many of these same goals during a person’s life. No one wants build a beautiful family only to see that family fight over their possessions when they are gone. To prevent this, you need a Will.