Most of us avoid thinking about dying. We especially do not want to plan for it. While it may feel morbid to you, it is one of the most important steps you can take to protecting your loved ones and your estate.
Estate planning is a crucial part of wealth management, but it is something everyone should consider regardless of the size of your estate. There are several reasons why you want to plan your estate. Some probably come quickly to mind, but others may be surprising to you. Continue reading to get the full picture of the benefits of estate planning.
When a family member passes away, it is emotional, and people are not always thinking clearly. They can quickly turn on each other, especially if there is a battle over who gets the deceased’s items. There is always that one person that wants to be in charge, even if that person should never be in charge of money or property.
When you make these decisions before you pass away, there is nothing left to fight about. You can make sound decisions where the money should go and even create college funds or other accounts for minors, or those you think may not handle large amounts of money. If you do not plan your estate and the family starts to battle each other, it almost always ends up in court, and a judge will decide who gets what. You can protect the people you love by planning. You can choose who gets what based on what you want, not what the courts want.
If you have minor children, you should take some time to consider what happens to them in the event of your death. This planning allows you to name guardians and create accounts to ensure their needs are met. When you have an estate plan in place, you can reduce and potentially eliminate estate taxes for those you leave behind. Inheritance and estate taxes can take a large chunk of your estate, but taking some steps today can help to eliminate them.
You can create trusts which prevent your property from becoming public knowledge upon your death. There are revocable and irrevocable trusts. They have some different rules around them. The most important one is that an irrevocable trust cannot be changed once created. You must be confident that is what you want before you enter into an irrevocable trust. Creating a trust allows you to give assets to your beneficiaries upon your death without it having to go through probate first. A trust speeds up the process for your heirs and keeps your estate matters private.
You probably are not surprised to know how interested people are in your personal property once you have passed away. When considering estate planning, it is best to consult with a financial advisor or estate lawyer to help lead you in the proper direction for handling your estate. This will ensure both your loved ones and your property is protected in the event of your death.