Having an estate is a very common thing among every individual, however, many believe that it is for the rich and wealthy, which is in fact totally wrong. Everyone, irrespective of their financial status or family dynamics, can get the benefits of estate planning if it is carefully planned. Eventually, the complexity of your estate planning will completely depend on the size and the type of your estate.
A well-organized estate planning will not only help you to transfer your possessions or assets to your children and family members but it will also help your inheritors from overpaying taxes. It will not only protect you and your assets after you are dead but also throughout your lifetime. With estate plan, all your assets are completely secured.
If you are planning to incorporate an estate plan into your financial planning, but are also confused at the same time, then consider these below listed reasons which will guide you the benefits of Estate Plan and you should have it.
The process of distributing or allocating of your possessions or assets upon your death is all about estate planning. In simple words, you can say estate planning is a writing of will or making a living revocable trust, or simply both. Estate Planning is the management of an individual estate which includes your car, house, saving accounts, life insurance, personal possessions among many others.
Estate planning comes to use when you can no longer able to make any of your financial or health decisions. It helps in handing over all your assets or personal possessions to over successors or beneficiaries after your death or become mental disabled.
Why Estate Planning Is Important For Everyone?
Estate planning is not only about allocating your finances or possessions, but it also includes details such as health care advise, minimize transfer taxes, funeral expenses, protect family wealth, organ donation decisions, storage of proper documents, passing on custody of minor kids, running your business, efficiently Transfer Of Tax, among many others.
We are now going to discuss several reasons on why you need an estate plan for ensuring your family members or loved ones to avoid any likely future devastating consequences.
Decide Who Inherits Your Assets And Possessions
Families, generation after generation keeps on transferring and preserving family’s values and possessions. With Estate Planning you can decide whom you want to hand over your assets and all your possessions or designate a plan on who inherits what. This also helps in avoiding any future family dispute over the inheritance of assets.
- Help Your Inheritors To Avoid Overpaying Taxes
Most of the times, the taxes can be much higher compared to your overall estate that you might be leaving much less than you have allocated to your inheritors. You must consider the estate tax, gift tax and generation-skipping transfer tax while transferring your money to your heirs. If you properly plan your estate, then you will transfer your assets or possessions to your inheritors with less tax burden as possible, which then make the process much simpler and reasonable for them.
- Choose Your Personal Estate Representative
If you don’t want any financial executor to handle your estate while you die or become mentally disable, then you can also choose any trustworthy individual whom you want to transfer this huge responsibility. Your Estate Representative that you will choose will get the power to pay your debts and even your expenses. Not only this, he/she will also get the power to liquidate your assets and even dividing up the cash proceeds.
- Guardianship Or Protection Of Small Kids
No one wants to leave their children alone, especially at their very young age. If you are a parent of small kids, then you must also prepare for the worst case scenario. The fact that there might be a chance that you may not be around to raise your minor children is quite disturbing and terrifying. Even if such event arises in the future, you still want your children to stay safe with those who you trust. Estate Planning also helps you in that; it will make sure that whom you want to be the guardians of your children before they turn to the legal age. Or else, court will get this thing in hands and will decide who are going to raise your kids.
- Handling Retirement Accounts
Without any proper estate plan, your selected heir for the retirement account funds may not reflect your existing wishes and it might later result in heavy tax consequences for your inheritors. But if you have a proper estate plan, then you can choose the ideal beneficiary.
- Allow Someone For Making Healthcare Decisions for You
If in future you become physically or mentally incapable of making any of your Healthcare Decisions, then at that time you will need someone else for making your medical decisions on your behalf. Estate planning also helps you with that; you can choose any of your family member or friend to act as a mediator who will take the medical decisions for you, in spite of relying on a doctor alone.
Overall, establishing an estate plan early on will only benefit you throughout your lifetime and even after your death. You will not be the only one who will get the benefit from estate planning but also your family members and the loved ones in the future by leaving your legacy or possessions for them.
One must take note; estate planning is a process which should keep the pace with your life or note. You should review your plans on regular interval as your life may go through several changes such as marriage, divorce, child birth and so on which might affect your current plan.