Many people spend much of their time thinking about planning their lives, what cars to get, what to wear tomorrow or what to make for dinner, where to travel… but not everyone considers what will happen once they are no longer present. If you spend much of your life working to acquire assets, it will be a shame that these are lost after your death or if you become incapacitated due to illness or injury. Putting estate planning in place will make sure that your assets get appropriately distributed the way you want them to when you are no longer around.
People tend to wrongly assume that they would only need an estate plan if you own mansions and expensive cars and yachts – but this is not the case. Estate planning is for everyone. In this article, we will discuss what estate planning is and why you need it.
What Is Estate Planning?
Many people assume that estate planning is the same thing as a will. However, an estate plan is a more rigorous process that comprises diverse types of official documents to protect your assets after your death, a will is part of the estate planning. As mentioned previously, individuals often assume that will planning and estate planning are essentially the exact same document and process. Although their core objectives may seem interchangeable, they are very different procedures. Both deliver your loved ones with guidelines about how your property should be handled after your passing, however, estate planning goes beyond that as it details your wishes concerning your health, finances, and other areas, even while you are still alive.
Why Do I Need It?
An Estate Plan Protects Beneficiaries
One of the most important things to consider is that an estate plan protects the beneficiaries of your plan – these are the individuals you want to pass your assets on to. As mentioned previously, this is not something for wealthy individuals only – even middle-class individuals should consider having an estate plan in place. If you own a house, for example, if you do not decide on who gets it after your death, this will be lost to the probate system. An Alpharetta estate planning attorney suggests that having an estate plan is the best way to ensure that your property is passed on to your loved ones with no issues. Consulting with professionals with expertise in this area is a smart move so that they can guide you through the process and ensure it goes smoothly.
An Estate Plan Protects Young Children
Thinking about death is always a difficult thing to do, particularly when you think about dying young. However, death can happen unexpectedly and this is particularly important to consider if you have young children who depend on you. It is always best to be prepared for the unthinkable. Having an estate plan in place allows you to be prepared for this to happen as it allows you the opportunity to appoint someone to take care of your children once you are no longer able to. If you do not prepare for this, social services and the courts will get involved and make the decision themselves about who raises your children.
An Estate Plan Spares Heirs a Big Tax Bite
Estate planning is mainly about protecting your loved ones and ensuring their financial security. Your assets may incur additional taxes that your loved ones will have to pay when the property is being passed on to them if you do not put an effective estate plan in place. A requirement of estate planning is to ensure that the property is transferred to beneficiaries with the view of creating the minimum possible tax burden for them.
An Estate Plan Eliminates Family Messes
We are all familiar with how tricky family situations can get when it comes to distributing a deceased family member’s property. If you have a lot of assets your loved ones may start fighting with each other to decide on who gets what, and if people are selfish, they may fight to get more than everyone else. Devising an estate plan will help reduce potential conflict between individuals. If there is a high level of conflict between your family members, it could result in the case being taken to probate court and the decision of how your assets would get distributed would be down to the courts. An estate plan will help you decide on how to equally distribute your property between all of your family members without them having to resort to conflict or the probate system for solutions.
If you want to ensure that your family is secure and stable after you are no longer able to be their provider, then you should consider putting an estate plan into place. Without this, your family may struggle to decide who gets what, and they may even lose all of your assets to the probate system. The information above should provide you with an overview of what estate planning is and why you need it.