Parents may take estate planning seriously because they want their children and other beneficiaries to receive a fair inheritance and make probate less challenging. It would be a mistake to assume only Nevada families of significant means benefit from estate planning. Even families experiencing financial struggles could benefit from effective planning.
Estate planning and financial struggles
Not every person, including elderly parents, have a positive net worth. Many factors could lead to an older person amassing a significant amount of credit card, line of credit, tax, medical, and other debts. When a parent’s children find out about a challenging debt situation, the young ones might try to assist with improving financial matters. Sometimes, it might be necessary to plan how to deal with an insolvent estate.
With an insolvent estate, the estate lacks the funds to pay creditors. Essentially, the estate is bankrupt. However, owing significant debts does not mean the estate is insolvent. A full accounting of assets may reveal the estate has enough funds to cover its obligations.
Ultimately, beneficiaries and the executor of the estate could be in a better position when they are prepared to deal with debt issues during probate. A lack of preparation might result in a stressful probate process.
Other aspects of estate planning
Estate planning involves many other issues outside of asset distribution and debt settling. Awarding someone power of attorney authority could be a critical duty, and a financially struggling parent might make a trusted child their POA agent. This way, the child could handle various financial and other daily responsibilities on the parents’ behalf.
Medical issues may prompt consideration of a living will or a health care proxy. Such documents might prove valuable if an unforeseen, catastrophic event occurs. Discussions about current health situations could be long overdue.