We all have an estate, believe it or not. Your estate consists of everything you own, your home, car, real estate, savings, checking accounts, life insurance, investments, personal possessions, and furniture. It doesn’t matter how modest or significant, everyone has an estate, and that is something in common for most people. However, the main problem is that you cannot take it with you when you die.
When this happens, you should understand how to control these things and provide your estate to the people you care about. If you wish to ensure that your ideas are carried out, you have to conduct will and estate planning with careful instructions whom you want to give something of yours and when they are to receive it.
Of course, you should have in mind that you want to make it happen with the least amount paid for legal fees, taxes, and court costs. We call it estate planning, which comprises a plan in advance and naming people whom you want to receive things you own after you die.
You should have in mind that proper estate planning is more than that, it also includes:
Instructions for your care if you become disabled in old ages.
- Instructions for passing your values based on your valuables
- Name inheritance manager and guardian for minor children.
- Provide for family members with special needs
- Provide for loved ones who may require future protection against divorce or creditors
- It includes life insurance for your family after your death.
- It provides you transfer of your business at disability, retirement or death
- Minimizes court costs, taxes and legal fees.
Since estate planning is an ongoing process, you should review and update it based on your financial situation and relevant laws in your lifetime.
It Is Perfect Choice for Everyone
People tend to think that estate planning requires for you to be a retired or elder, but as we noticed above, we don’t have a complete prediction of how long we will live. Therefore, if you want to prevent hassle in case of an accident and to provide security for your family members, you should take estate planning as a dangerous thing for your future.
At the same time, estate planning is not only for rich and wealthy people. Of course, people with more wealth tend to reach estate planning because they think more on how to preserve it and how to divide it among family members. Therefore, proper estate planning will provide you security even if you have modest income and assets.
Most People Neglect It
Individuals decide to put off estate planning because they think they don’t own enough, or they are not old enough. However, accidents tend to happen without notifying anyone, which means that by adding estate planning to your life, you will be able to gain additional security in case anything happens.
5 Reasons Why You Need Estate Plan
- You Can Avoid Probate
One of the most common reasons for choosing an estate plan is to avoid probate. Even though many people don’t know what probate means, they know one thing – it is essential to avoid it at all costs. You have to search online to check different horror stories told by the media and people from all across the globe.
To learn more on probate, you should click here.
- You Will Reduce Estate Taxes
If you make a significant loss of the estate to the payment, you will be able to reduce inheritance and federal state taxes. This is one of the biggest motivators for people to choose estate planning for their future.
Even though most basic planning includes numerous characteristics, if you are married, you will be able to reduce and also eliminate estate taxes by setting ABC Trusts or AB Trusts as part of revocable living trusts or wills.
Apart from that, you will be able to use advanced techniques that will allow you to make the inheritance and estate tax bill less burdensome.
- You Will Avoid A Mess And Hassle
Clients tend to seek the advice of estate planning attorney after seeing or experiencing loss of someone close. As we can see all around us if you don’t plan everything can fall when something happens to you.
Therefore, we recommend you to choose someone to be in charge, especially if you become mentally incapacitated before you die. That way, that specific someone will know what to do and how to accomplish your wishes which is way better than costly court proceedings.
- You Can Protect Beneficiaries
It is essential to mention two primary reasons why people decide to put together an estate plan to protect their beneficiaries. First one is to defend minor heirs, or to preserve adult beneficiaries from outside influences, bad decisions, divorcing spouses and creditor issues.
In case that beneficiary is minor, all states require conservator or guardian that you have to appoint to oversee minor’s finances and needs until it reaches a legal adult age (18, or 21 depending upon the laws of the state).
Check this website: https://www.investopedia.com/terms/b/beneficiary.asp to learn more on legal rights of beneficiaries.
You will be able to prevent family discord and other legal expenses that will take time to designate trustee and guardian for minor beneficiaries. On the other hand, if the recipient is an adult, but it is terrible in managing money, or you have other reasons to doubt in the possibility to keep the money, then you should create an estate plan that will protect the beneficiary from bad decisions.
- Protecting Assets From Creditors
In the last decade, asset protection planning is one of the essential reasons why most people decide to make an estate plan and to meet the estate planning attorney. As soon as you see that lawsuit is on the way, you should have in mind that it got too late to protect your assets.
Therefore, you should start with a financial plan that will protect your assets for a lifetime and provide you beneficiaries what you’ve wanted after your death. But you have to do it before it enters the court.