Everyone leaves behind an estate. Everything you own, movable and immovable possessions form a part of your estate. Your children will be grateful that you did your estate planning well beforehand and left them with clear instructions about your wishes. It not only reduces the legal hassles but also helps your heirs avoid conflict and reduce costs of inheritance.
What Exactly Is Estate Planning?
Man is mortal, and there will be a day when he leaves back his mortal possessions. To smoothen the process, you can plan in advance and name the people who you want to leave your things to after you die. The need of the hour is to plan the process well. This is important so that you pay the least amount of taxes, legal fees, and other court costs. The idea is to frame instructions that state what your wishes are, who will ensure that they are carried out and who will be the recipient.
Necessity Of Estate Planning
Estate Planning is a cumulative plan to pass on your values, culture, and ethos along with material possessions to your descendants. The instructions also include your medical care if you were to become disabled before death. You also need to name a guardian who will manage the inheritance of your dependents.
The first prerogative is to safeguard your business interests in case of any sudden incidents like disability or death. You could need to provide for heirs who are irresponsible with money and need proper protection if there is a large estate to bequeath. This is especially significant when there has been an acrimonious divorce. There might be circumstances that need to be ensured protection from creditors as well.
In the unfortunate event that you have family members who have special needs, you can arrange to care for them adequately. These measures can come into play without disturbing the benefits that the government assures to bestow on the dependent.
It is imperative that you have enough life insurance to keep your loved ones insulated by the loss your death would bring about. Furthermore, it is also crucial that you avail of medical insurance, disability insurance, and also long term care insurance to tide you over any long term illnesses or injury. Your family will thank you for a lifetime for relieving them of this financial burden.
Estate Planning Is Mandatory For All
There is no reason to wait until retirement or old age to plan how to arrange your affairs. It is not even necessary to be rich to think of estate planning. It is often families with modest incomes and property that need to play it safe by planning the seamless transfer of assets at the proper time to minimize costs and hassles.
It Is Necessary To Plan Early
It is challenging to accept mortality, so we leave estate planning until we cannot ignore it. This often becomes the bane of financial planners. Moreover, contingencies happen, and they are sudden too. If you have not put thoughts on paper and planned the succession of your assets, your family may be in trouble. A void of a written will mean that your assets will probably be distributed as per the probate laws of your state. If you have minor children, the court will control their inheritance until they are adults. After your parting, your spouse can go through a lot of stress due to financial issues. This is avoidable if you do plan well in time.
Estate planning is a continuous and dynamic process. Therefore you should start young and review the status regularly. The strategy will change as you grow older and gather more possessions, and your family grows larger.
Write A Will Or Create A Living Trust
You need to start with writing a will. It is a statement that documents your living testament to what you want to do with your estate after you depart. A will demands probate. It can be a cumbersome and convoluted process. More so if the distribution of your property is in multiple states.
Moreover, it can be prohibitively expensive too. Many monetary benefits like life insurance, annuities, IRA’s and such are passed on to the heir without attracting the probate process. If the nominee is a minor, the court may require a guardian to oversee the funds till the minor reaches adulthood.
The other option is to frame a revocable living trust. This is the best way to avoid probate and prevent the control of your assets being granted to the state. The revocable trust ensures that your assets get looked over by a trustee till your heirs attain adulthood. It is the smartest way to minimize legal fees. Moreover, it maximizes the security of assets. It is a tad more expensive to draft a living trust than a will. However, it may drastically reduce the interference of the court at the time of asset disbursal. The estate planning lawyers can help you strategize how to plan for the future responsibly.