Many of us seem to shy away or make light of topics that involve our future. Planning for the present seems more fun and appealing, rather than worrying and discussing who will inherit our properties, personal possessions, and even the legacies we were able to build. Estate planning can be a stressful and overwhelming process. But at the same time, it can be empowering too, since you won’t be leaving the decision of how your assets are to be managed up to the courts.
Estate planning seems intimidating since most of us believe that this is only for wealthy people. But times are changing now. Whether you have an expensive home or living a simple life, having a plan for the future is the best way to secure everything you worked hard for.
The good thing about it is that it’s no longer as difficult as it used to be. Estate planning is now possible with a simple click on your computer! You can easily set up an account on various online trusted platforms such as Willed. It’s convenient and highly accessible.
To start, here is a list of the common reasons why creating an estate plan is important.
1. It Will Reduce The Tax Burden For Your Beneficiaries
An estate tax is a tax applied on the property that will be transferred to your beneficiaries when you pass on. Some states do not impose an estate tax, while others exempt certain estates from taxation or limit the rate of taxation.
Drafting an estate plan can help minimize or even eliminate the amount of tax to be collected from your assets. It could also help your beneficiaries avoid having the property that’s been bequeathed to them be taken away by the government. This can happen if an estate is not valued correctly and gets appraised as a high-level.
Having an estate plan will not only protect your hard-earned assets but can also protect your beneficiaries.
2. You Get To Appoint The Person To Execute Your Wishes
When creating an estate plan, not only do you get to outline how your assets are to be managed, but you can also name someone you trust- a family member, a friend, or a relative, to manage them on your behalf.
Laws governing wills and trusts often allow the testator, the person who’s making the will to appoint a trustee, a person who will have the legal authority to manage your assets. Their responsibility includes handling all relevant documents, managing your trust assets, accounting and filing taxes, and more, according to the terms of the trust.
Without an estate plan, the court gets to decide not just how your assets are to be distributed, but also who will manage your accounts.
3. You’ll Protect Your Family From Long Legal Proceedings
One of the most common reasons why it’s a good idea to set up a will as early as you can is because you’ll be sparing your loved ones the trouble of probate. Without a will, legal proceedings are necessary to review the assets you’ll leave behind. It will also involve proving to the court, beyond any doubt, that your family is entitled to inherit them.
Probate can take months or even years. On top of that, it can cost hundreds or thousands of dollars. Resources will be spent on these court proceedings, instead of going to your beneficiaries.
Without a will, probate can be a messy and expensive experience your mourning loved ones will have to endure.
4. It Will Ensure Your Medical And Financial Direction Is Followed
Many of us think that estate planning only covers what happens when you pass away. However, part of estate planning also includes the processes in the event you become disabled or incapacitated. Protecting your assets isn’t the only purpose of estate planning, because it can take care of you too.
When you have a power of attorney (POA) drafted, both for healthcare and financial affairs, making decisions can run smoothly. With this, the attorney-in-fact, the person you appointed to make decisions on your behalf, can ensure that your finances and medical care directives are handled and implemented according to your wishes.
5. Plan The Future Of Your Business
Planning ahead can protect the business you built and worked hard for. It enables a smooth transition of the ownership of your company to your chosen beneficiary. Aside from that, having an estate plan can also help ensure that records are properly kept and taken care of. This way, you can be sure that your business will continue to run smoothly even after you pass on.
6. Prevent Family Disputes
Losing a family member can be a challenging setback for any household. Adding legal battles over inheritance into the mix can be a recipe for disaster. Having drafted your will and trust can help you and your family avoid this kind of problem. Being clear about who inherits what will make things much simpler. It can easily straighten out things and help avoid family issues and arguments.
Creating an estate plan is an important step in preparing for the future. It can be a tedious and overwhelming task, but at the end of the day, the best value you can get from estate planning is granting the loved ones you’ll be leaving behind peace of mind.