7 Reasons To Consider In Estate Planning
by Arnab Dey Real Estate 22 March 2023
Almost everyone has an estate. An estate consists of everything you own, your home, car, saving and checking accounts, life insurance, personal possessions, and furniture. No matter the size of your estate, you will never die with it. If you die, you will leave your assets in the hands of your loved one and the organizations you care about.
To accomplish this, you’ll have to state who you want to receive your assets when they receive them, and what you want them to receive. This is what estate planning entails, making prior plans and naming the organizations or people you want to receive your properties after your demise.
Things You Need To Consider Before Starting Your Estate Planning
Taking the proper steps, such as seeking the help of an estate planning attorney, will help you carry out your plan better. It can be disastrous for your wealth if you don’t do estate planning.
Most multi-billion ventures have collapsed after the death of their owners. Lack of estate planning will leave your heir spending millions of money fighting for the division of the properties. Here are the reasons why estate planning is necessary.
1. Estate Planning Protects Beneficiaries
Estate planning is not only for individuals with a high net worth. Nowadays, middle-class families have to plan in case something happens to a breadwinner. You don’t have to be very rich to do well in the real estate or stock market, both of which include assets that you may want to leave to your heirs.
If you don’t decide who inherits your properties after your demise, you will not have control over what happens to the property. Without an estate plan, the court will be forced to decide who will inherit your assets, a process that accumulates fees, takes years and gets really ugly.
This is because the court doesn’t know whose siblings are responsible and who also has access to wealth. If you die without a will, the courts will decide who will get the inheritance.
2. Estate Planning Protects Children
If you are a parent of young children, you’ll need to prepare in advance. Nobody would like to die young, but you will need a will in your estate plan. This ensures that your children will be cared for in the way you wish.
You will need to write who their guardians will be in case of the demise of both parents before they reach the age of 18. If you don’t have the will to state their guardians, the court will decide who will care for your children.
3. Estate Planning Protects Heirs From Big Taxes
Estate planning involves protecting the people you care about, which includes protecting them from the Internal Revenue Service. The goal of estate planning is to transfer assets to heirs to reduce for them the task burden.
Estate planning can help couples reduce all or much of their federal and state estate taxes. You can also reduce the income tax your beneficiaries will have to pay.
4. Estate Planning Eliminates Family Quarrels
There have been many horror stories. Someone wealthy dies, and a war begins in the family. One sibling may also think that they should get more than the others. Or another thinks they will be in charge of all the finances even though they have a history of poorly handling finances.
Such quarrels may end in court as family members go against each other. An estate plan is, therefore, necessary to stop disputes. This will help you choose who will be in charge of your finances when you die or if you become mentally disabled.
You can quell any family fights and ensure your assets are distributed in the way you intended. You’ll have to think about deciding to divide your estate equally. If you especially have more than one spouse, estate planning is one of the most important things to consider.
5. Estate Planning Saves Money And Time
If you die without a will, the laws of the state where you own property or live will determine what will happen to your property and how it will be divided. The court will name a person who will distribute your assets. In most cases, the surviving spouse is given that job.
If there is no surviving spouse and no relative can handle the job, the court will appoint a public trustee to divide your assets according to the law. At this time, nobody can touch your assets.
Your assets are frozen until the court pays off debts, searches through all the details of your estate, applies state law and decides on your assets’ allocation. The probate process includes court appearances by lawyers and paperwork.
All this can be time-consuming; it can take months or even years. The legal bills can be a massive cost for the surviving family members. You can avoid all this and reduce expenses and time by doing estate planning.
6. Estate Planning Will Give You Peace Of Mind
By creating an estate plan, you can know that your wishes will be fulfilled and your loved ones will be provided for after you pass away. You will not have to worry about leaving behind your hard-earned wealth as you will be assured it will be in safe hands.
Maybe at the first glance, the estate planning costs seem to be a little high but this cost is actually worth spending.
7. Protecting Your Business
If you own a business, estate planning can help ensure it continues operating smoothly after you pass away.
You can create a plan that ensures your business is passed on to the right people or sold to benefit your family.
The Bottom Line
You’ll need an estate plan if you want your loved ones and assets protected when you can no longer do so. Without an estate plan, your heirs could have significant tax burdens; the court will decide who to raise your children and designate how your assets will be divided.
Estate planning can be a challenging and tedious process. Still, with the help of an estate planning attorney, you can have a seamless process of documentation, planning, and fulfillment of your will.