Estate planning is commonly thought of as something only rich people need to do. But the truth is, everyone can gain from making plans concerning their possessions after they are gone.
Do you have an estate plan? Do you wish to know more about will and estate planning? The process may not be easy, but it’s essential. To make things less painful, you can start on the right foot, like picking the top lawyer. But first, you may want to do some of your own research. Let’s get started!
First things first – What is Estate Planning?
Estate planning is organizing your finances and property in preparation for your death. It includes creating a will, trust, and power of attorney. It can also involve funeral planning and arranging for support for your loved ones during their challenging time.
Assets like jewelry, furniture, car, and even your pet can be part of your estate. And if you don’t have a plan in place, the state will decide what to do with your assets, which no one wants,
Know A Little More
Picking the right lawyer is critical when it comes to estate planning. You want someone experienced and knowledgeable in this area, but you also need to find someone who you feel comfortable around. Someone who will take the time to answer all of your questions and make sure you understand everything.
You also want to make sure you choose someone up-to-date on the latest changes in the law. The last thing you want is to have your will contested because it wasn’t written correctly.
Hiring a lawyer is one great option, but if you do not have the finances, you can take assistance from the online will and trusts to help you out. Because let’s face it, estate planning can be confusing and a little overwhelming, and you will need assistance.
It is not just about producing a will. It’s about ensuring your loved ones are provided for in your absence. It’s about peace of mind and having comfort in the knowledge that you have everything in order.
Let’s check out are seven reasons why estate planning is crucial
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You Can Choose Who Inherits Your Assets
Estate planning isn’t only for money-loaded celebrities and people in business. Regardless of how big or small assets you have, you need to think about what will happen to them when you die. It could be your vacation home or your real-estate investments.
You need to decide who will inherit these items and make sure it is legally binding. Otherwise, your family may struggle with a long and costly legal battle over your possessions. And it can get nasty.
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You Can Still Guide Your Family
Some orthodox families follow a tradition where the eldest son inherits everything. But what if you don’t have a son or your children are minors? Your will is a way to make sure your belongings pass on to your children the way you want. You can stipulate that your daughter gets the family home or that your art collection goes to your nephew.
Moreover, you can set up trusts to provide for your grandchildren’s education. Your will outlines your wishes regarding what should happen to your possessions and estate upon your death. It’s a roadmap for your family.
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Estate Planning Can Help You Save on Taxes
Federal estate taxes are primarily payable by the ultra-wealthy. In 2021, the federal estate tax exemption stood at $11.7 million per person (or $23.4 million for a married couple). So, unless your estate is valued at more than $11 million, you need not worry about federal estate taxes.
But even if your estate is not subject to federal estate taxes, it may be subject to state estate taxes. To reduce the burden of these taxes on your loved ones, you can use estate planning strategies, such as trusts. You could give irrevocable trusts during your lifetime or set up trusts in your will.
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It Can Protect Your Young Children
Dying at a young age isn’t something any of us like to think about. But if you’re a parent of young children, it’s important to plan what would happen to them if you were not available.
You need to decide who would care for them and how. You also need to ensure they receive financial assistance. Instigate this by setting up trusts or designating a life insurance policy for them. Without a will, the state decides how your assets will be divided and who will care for your children. And that’s not a risk worth taking.
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Avoid Probate
The deceased’s valuables pass to their beneficiaries through the probate process – a court-supervised procedure for handing over property. It might take anywhere from a month to over a year to finish.
The court will appoint a personal representative to oversee the process during probate. It is the personal representative who is responsible for inventorying the deceased’s assets, disbursing debts and taxes, and distributing the assets to the beneficiaries.
If you die without establishing a will, your assets will go through probate. And if you have a large and complex estate, probate can be a nightmare for your loved ones. You can use estate planning strategies to avoid probates, such as trusts and beneficiary designations.
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You Can Choose Your Personal Estate Representative
If you die without a will, the court will appoint a personal representative to oversee the distribution of your assets. But if you have a legal testament, you can choose who you want to be your representative. This is a position of significant responsibility, allowing the individual to pay off your debts and expenditures as well as the power to liquidate your assets and distribute the money proceeds.
The person you select may significantly influence how your will comes into effect, but having control over who you want makes it far preferable to letting the probate court rule. It is an important decision because the personal representative has a lot of responsibility.
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Earn Yourself Peace of Mind
Our family is everything to us. They are our past, present, and future, and we would do anything for them. Estate planning is one of the ways we can take care of our loved ones, even when we are not around.
It may not be an alluring topic to think about, but, in the end, having a plan in place will give you and your loved one peace of mind. Knowing that you have secured everything and that your family will be provided for in the event of your passing is a weight off your shoulders.