There are so many examples of people who have failed to plan their passing. But, of course, it is fairly simple. No one wants to plan for something that comes after their death.
The most recent example is Chadwick Boseman, who died tragically from cancer at the age of 42. He never planned for his estate and what would happen to them once he died. As a result, his wife had to file a document in the probate court asking to be the next administrator of her husband’s property.
The reason for estate planning might be personal, but from the external perspective, keeping your affairs in order is vital for the financial future of your loved ones.
What Is Estate Planning?
Estate planning is the preparation of the task that manages the individual’s property once they are incapacitated or die. The planning includes the management of the asset and naming a successor or heir to administer the property.
The estate planning process is quite simple; you just need to create a list of the property on your own and decide who gets what. Click here to read more about estate planning.
Why Is Estate Planning Important?
An estate plan is a legal tool that enables a safety net around you and your family. With effective estate planning, you can safeguard and manage the property from being handed down to others after your death.
Estate planning helps you secure your family financially by ensuring your family members can own your property in an emergency. Furthermore, an estate plan reduces the effort of going to the probate court and distributing property in an uncontrolled manner.
Estate planning is for all ages. However, if you think you have some property or asset, you must comply with the estate plan. Here are the top reasons for having an Estate Plan.
1. Avoid Family Fights
We have all seen how family members fight for the property after one of their rich family members dies without leaving a will. These dramas are so severe and rampant that siblings end up fighting against each other.
However, this mess can be avoided with simple estate planning. With estate planning, you can determine who gets what and prevent the occurrence of such ugly disputes.
2. Saves On Taxes
One of the main goals of estate planning is to save taxes on the transferred assets and property. Having a Will ensures that your property is transferred to your heir in the most tax-efficient way.
While we are at taxation on hereditary property, you need to be aware of three kinds of taxes.
- Estate tax.
- Gift Tax.
- Generation-skipping transfer tax.
3. Protects Your Children
No one wants to admit that they will die someday. However, it is one of the bitter truths that need to be accepted. If you have a family, death holds more meaning. The moment you are dead, you have no control over your property. Others will have no idea how to distribute it.
However, having an estate plan defines the designated beneficiaries. This is really helpful in case your death leaves your children alone. You can name them the heir and administrator of your property.
4. Protect Your Assets
Having sound asset protection coupled with a comprehensive estate plan ensures that your properties don’t fall into the wrong hands. In addition, this plan ensures that you don’t lose your property to any lawsuit. For example, if you can pay any mortgages, your house will be protected under this plan.
5. Avoid Probate Courts
If you are not leaving a Will, you allow the probate court to take full control over your property. Once the property is in their hands, they will decide the process of distribution.
With that being said, there are chances that the more deserving candidates might not get what they deserve from your property. Hence, you must plan your estate so that your family members get what they deserve.
An Estate Plan Puts You In Control
Not accounting for what might happen to your family and assets when you are no more on this planet. If you encounter an untimely death, the statute will administer control over your property and assets. However, planning your estate for such scenarios gives you full control of your property even after death.
Regardless of your financial standing or age, discussing with a professional your estate plan can help you ensure your loved ones are cared for after your death.