Estate planning means preparation of tasks that manage the estate of an individual in the event of their death or incapacitation. Most estate plans are executed with the help of a local estate planning attorney who holds experience in estate law.
Estate planning includes how the assets of an individual will be managed, preserved, and distributed after their death. It also considers the management of their financial obligations and properties in case they become incapacitated.
An estate consists of assets like properties, houses, stocks, cars, life insurance, debt, pensions, and personal belongings. People have several reasons for estate planning like preserving family wealth, funding education of children/grandchildren, providing for surviving family members, or for fulfilling charity motives.
However, if you do not have a huge estate to leave behind, this may seem unnecessary. Still, it is advised to take the help of an estate planning lawyer to ensure a smooth inheritance as well as estate allocation.
Why Should You Consider Estate Planning?
For Protecting Beneficiaries and Minor Children
If you are the sole breadwinner for your family, considering estate planning is crucial. This is because your home or even smaller properties may go to someone you do not want to if there is no estate plan.
Another reason is that the court decides for the undesignated estates’ entire process can take years and lots of money. Even your siblings may acquire access to your property while your spouse may not be able to exercise complete control.
You might be a young parent and while you obviously would not think of your death at a young age, it is always wiser to leave behind a will stating the name of guardians of your kids. After all, you would not want anybody to raise your children until they turn 18.
To Minimize the Transfer Taxes
Estate planning is about protecting your loved ones. Do you know that if you leave behind a will, your heirs would also inherit tax burden? Yes, even with a tiny bit of estate planning can reduce some or all of the state and federal estate taxes as well as state inheritance taxes, which otherwise can be very pricey.
Contact an estate planning attorney to know how much of your estate can you save from taxes and to know the appropriate plan for doing so.
To Eliminate Family Messes
The plot of several movies, plays, novels, etc.often revolves around how the death of a wealthy person leads to war amongst family members for inheritance. The problem is a notorious kid may not understand the financial responsibility and end up losing all their inheritance, which would prompt another kid to let them handle the money.
This may lead to a cold war between the two. If you own a business, it can also cause your children to fight in order to acquire your business. However, you can avoid this situation if you mention in your will who will receive what and how much. Estate planning lets you control how you want your estate to be allocated to reduce the chances of family disputes.