When people hear the word Estate, they associate it with huge stock portfolios, artwork, antiquities, and other expensive items. And when they learn of estate planning, they still seem to believe it is for the wealthy, although it is essential for anyone with even a tiny amount of assets.
If you want a say in the happenings of your assets and that your heirs do not have to fight over them, this article will explain to you the importance of wills and estate planning.
What is Estate Planning?
Estate planning is a legal guideline that describes how you would like your assets to be managed in the event of your death. When you create a legally binding estate plan, you safeguard your assets and ensure that your legacy will benefit the people you love and choose.
These assets can include houses, cars, stocks, art, life insurance policies, pensions, and any debt you might have accumulated.
There are multiple reasons for planning an estate, such as preserving a family’s wealth, providing for a surviving spouse or children, funding children’s or grandchildren’s education, or leaving your legacy to a charity.
Hence, estate planning is not only for the wealthy or the elderly. Regardless of their age or finances, everyone can benefit from having a comprehensive estate plan, assuming they have assets to leave behind and people to leave them for.
If estate planning decisions are not made while you are alive, the government and courts will make these decisions after your passing. However, these results might not suit your desires or the needs of your family.
Why is Estate Planning Important?
Here are a few reasons why wills and estate planning are essential:
Let you Decide on Inheritors
If you die without a will, then the state will decide what will be done with your assets and who will be its beneficiaries. These rules differ from state to state, and for that reason, it is best to seek help from an estate planning lawyer who can solve this issue by drawing up a will that ensures your assets go to the intended parties.
Reduces the Estate Tax
Federal or state inheritance taxes could be pretty high if there is no estate plan in effect for your death. This could be an unwanted burden to your inheritors and can be easily eliminated using trust.
An expert estate planning professional can help you use some techniques that will reduce your tax amount.
Protects Young Inheritors
Since the age difference between children and parents can be considerable, a parent should consider their children’s future after their death. The only thing that would guarantee security for the children’s future is comprehensive estate planning.
Parents usually know what is best for children, and therefore it is best to appoint a guardian for them by estate planning if you die before they turn 18, or else the court will decide their fates.
Avoid a Family Dispute
Family disputes mainly occur when the property is being distributed after the death of a loved one. If you have multiple marriages and children in those marriages, it can get messy. You would not want this mess to go to court so. Therefore, estate planning will save your family from this situation.
Protect Your Property
Estate planning will help secure your wealth, but it will also protect the assets you currently own. Going through the estate planning process with your lawyer will help you become aware of any legal disputes or lawsuits that your heirs may face. Estate planning will give you a heads up on these problems and help you meet them earlier.
Restrict Access to Assets
If you are worried that this sudden windfall of wealth will spoil your child or the child will spoil the wealth, estate planning can help by creating trust funds or using other stipulations that can protect your wealth while still ensuring your children get their rightful share.
Complete any Unfulfilled Philanthropic Goals
Many people desire to do some philanthropic work with the wealth they leave behind. To dos so successfully, you would require the help of some highly experienced estate lawyers.
Even though philanthropy is noble work, it can also be highly complex, and a lawyer can make sure things run smoothly after your death.
For Mental Peace
Wealth does not equal happiness. Having too much wealth could be the thing to be anxious about, and one of the main worries people will have is what happens to it. Once you have an estate plan drawn up, you will know what will happen to your wealth, which will provide you with peace.
Do You need a Will or Estate Planning?
A study showed that 25% of Canadians did not write a will because they believe they are still too young to worry about it. The exact amount said that they didn’t have enough assets for estate planning to make sense.
An unexpected event can happen at any moment, and you never be too young to plan for the future people underestimate what they will have to pass on if they meet an early end.
Therefore, it is always advisable for individuals, immaterial of their ages or financial status should look into estate planning as it will help them and their heirs from facing issues down the line.
Conclusion
Remember that estate planning is not only for the wealthy, and it doesn’t have to be a complicated process either. An experienced estate planning lawyer can create an estate plan customized to your needs, financial, and family situation.
The sooner you get started, the better, but keeping the plan current is advisable, especially after significant events such as marriage, divorce, death, and birth in the family. It’s also wise to keep an eye on tax laws and other financial policies. If your plan is outdated, your inheritors may face challenges when trying to access your assets.
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