Estate Planning: What You Need To Know
Smart people who like to think of the future look to secure estate planning. Estate planning is very complicated, and not everyone understands everything about it. In this article, we’ll talk about what estate planning is and everything else you need to know about it.
What is Estate Planning?
Estate planning is the process of making sure that your final wishes are honored, particularly wishes about your properties and health care. It also ensures that your loved ones are properly provided for in case of your death.
Planning an estate will include what’s going to happen to all of your assets and property such as:
- Bank accounts
- Life and healthcare insurance policies
- Personal properties like artworks, cars, furniture, household goods, jewelry, etc.
- Real estate
- Stocks and businesses
Estate planning is for everyone but only a few people are able to utilize it because most people don’t really know much about it. Most people think that estate planning is only for the rich.
Important Reasons Why You Need To Plan Your Estate
Here are the most important reasons why you want to have estate planning.
- Prevents your relevant assets from going to unintended beneficiaries.
The main benefit of estate planning is to have designated heirs or beneficiaries receive your valuable assets when the time comes and you are gone.
- Without estate planning, the court will decide what happens to your assets. This could be a very long and ugly process, and your assets could go to the wrong beneficiaries.
- The court has no way of knowing which of your beneficiaries should be responsible for your personal properties or who is entitled to your financial assets.
- The court will also not automatically rule out that your spouse will get all of your assets.
- Protects your children.
No one wants to die young, but if you’re a parent of very young children, you must think ahead for the sake of their future. To do that, you need to get an estate plan so you can protect and prepare your family in case of your sudden death.
- You can use the will portion of an estate plan to ensure that your children are taken care of in the way that you want. You can also name people who you want to look after your children in case both parents die before the children turn 18.
- Without a will like this, the court will again decide and determine who will be responsible for your children if both parents die.
- Prevents your beneficiaries or heir from overpaying taxes.
Estate planning is all about protecting and ensuring the welfare of your loved ones in case you die. An estate plan will protect your loved ones from paying big tax hits.
- Estate planning also aims to reduce estate taxes. The process aims to transfer your assets to your heirs by reducing the estate taxes as much as possible.
- An estate plan can help couples reduce or get rid of all their federal estate taxes or state inheritance taxes.
Without an estate plan, your heirs could owe a lot of taxes.
- Prevents family mess when you die.
There a lot of families who wind up in serious quarrels when one family member with money and lots of property dies. There might be one sibling who thinks that he or she deserves more than others, or one sibling who thinks that he/she should be in charge of the finances and your valuable assets even though he’s made a lot of financial mistakes in the past. Such messes can get very ugly and may end up in court with siblings fighting against each other. An estate plan could prevent this from happening.
- An estate plan will allow you to choose who will be in charge of your finances and your other assets if you die or become mentally incapacitated.
- This will ensure that your family may avoid fighting against each other and ensure that all of your assets are handled in the manner that you want.
Prepare for the Unexpected with Estate Planning
As we continue to live our lives, there comes a time that we forget to think about our future. We are so focused on living in the moment, that we no longer think of what’s going to happen later on. Although it is not entirely wrong to live in the moment, it is always wise to think about the future.
Estate planning can help you prepare for the unexpected. It is what you will need to do to protect your assets and your loved ones when you are no longer able to do so. Without an estate plan, your beneficiaries could end up fighting against each other. A lawyer such as ones here can help you understand how you can ensure asset protection and other relevant aspects of your estate.
On top of that, your heirs will be facing massive tax payments to accomplish, and the court could take over your assets and decide how your assets are distributed, and who gets it.
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Kiren is a estate law writer who enjoys writing about subject in relation to real estate and law. He has written for a few blogs in the past, and enjoys sharing his knowledge with those who enjoy reading. In his spare time he enjoys spending quality time with those he loves.