Many people do not devote a lot of time to estate planning. It’s often a lot more exciting to plan out a vacation or what type of car to buy. When the topic of estate planning does arise, many people just think it is for the rich and not necessary for anybody else.
However, estate planning should be an integral part of any household. The dividends are significant, and a well-thought-out plan can save your loved ones a lot of time. Estate plans are useful for all types of households, even if you do not think you have a lot of assets to pass on.
Here are three reasons why estate planning is important.
Protects Your Wealth: Many people are able to generate some sort of assets that they want to pass onto heirs. An estate plan gives you the power to dictate what types of assets go to specific family members. In the absence of an estate plan, the courts will divide up your assets, like stocks, property, and valuable artwork, and then distribute as they see fit. This process can take a lot of time and leave some members of your family very unhappy in the process.
The distribution can also be a lot different than you would have done it. Courts do not know much about your family members like you do and might give a lot of money to a sibling who is not the most responsible with a lot of cash. Courts will also not guarantee that your living spouse gets everything. Making an estate plan gives you a chance to designate your assets to certain heirs in a fair way.
Keeps Young Children Safe: Estate plans are a very important step for families who have younger children. In an estate plan, the will gives you an opportunity to dictate how your kids will be taken care of, and what assets they should receive. It also lets you name a guardian for them until they reach the age of 18. With no will in place, the courts will step in to decide how your children should be taken care of. This could mean foster care for your kids if there are no guardians in place, and they might not have access to much of your assets once they turn 18.
Click here to learn 7 estate planning tips!
Protects Against Big Taxes: Your loved ones do not want to deal with a messy tax bill from the IRS when they are trying to settle your estate. Estate planning is an important step towards mitigating some of these tax burdens after you pass away. Couples often can slash the majority, or even all, of federal and state estate and inheritance taxes with even a basic estate plan. There are also ways to cut the amount of income tax that gets passed on to your beneficiaries. All of these benefits come with the development of a good estate plan that will save your loved ones a lot of time and money.
If you want to be sure your loved ones are protected when you pass away, an estate plan is the way to go. It will smooth over other family members and ensure your wishes are carried out. Families who do not have estate plans often see loved ones fighting and bickering in court over assets, leading to a lot of strife and conflict.
Do you have a question about estate planning? Click here to contact the experts at Hunsberger Dunn LLP today!