No. You are not about to die.
Estate planning and inheritance planning are not just crucial for those in their old age and looking forward to distributing their wealth among their younger generation; it is important for everyone with wealth. And, this article will shed light on why estate planning is so crucial for you and the younger generation. It will help you avoid unnecessary conflict and help you pass your wealth to the rightful heirs.
That being said, let's read about the top reasons why estate planning is so crucial today.
Best Reasons Why Estate Planning is Crucial
The Haas Properties team brings you some of the best reasons you need to have estate planning:
- Estate Planning Protects Beneficiaries
You don't need to be multi-millionnaire to plan for your estate's inheritance. Today, almost everyone is investing wealth in some way or the other. Most people trade in stocks, some have assets on real estate, and now people have even started trading in forex and bitcoins. So the estate is pretty dispersed for everyone.
Many families have single or multiple breadwinners. They create wealth for the whole family. But with time, they get old, and at this time, they do wealth planning. In some cases, they don't even do wealth planning at all, which can cause brawls among family members.
Even if you're only leaving behind a second home, you should still plan who will get your property after you pass away because then you won't have any control over what happens next.
2. Estate Planning Prevents Unwanted Inheritors
In most cases, if your children are young, after your death, many people will claim to be your inheritors that are related to you in some way or the other. That can cause problems for your children who are already underage and can't make decisions independently.
So, you need to appoint guardians for your children if both parents die before they reach the age of 18. This will guarantee that they are cared for in a manner that you approve of. If you don't specify these guardians in your will, the courts will decide who will raise your children.
3. Estate Planning Protects Young Ones
We've all encountered the tales of terror. Because someone with money passes away, a family feud ensues. One sibling may believe they are entitled to more than the other, or one may believe they should be in charge of the money despite a history of debt.
Family members may be pitted against one another in court due to such turmoil, and no one wants that to happen to their families. This is why estate planning when you are alive is the best way to secure your assets and ensure that they go to the right heir after your demise.
Another reason for having an estate plan is to avoid disputes before they occur. Your estate planning will help you manage finances and assets if you become mentally incapable or pass away. At the same time, estate planning will also benefit your young ones who are not financially capable yet of getting on their feet faster.
4. Estate Planning Also Saves Heirs a Tax Problem
Without estate planning, your heirs will have to pay a lot of federal taxes. There are ways to reduce that if you properly list heirs in your will and plan your estate distribution appropriately. The government is always trying to get the most tax from you, but that is only possible when they have the right to do that. If you plan your estate accordingly, the government will be liable to reduce the amount of tax that they owe your young ones when they become the heir of your property.
Many estate planning firms are available that can help you reduce the amount of tax paid on the estate. If you search on Google for estate planning near me, you will find many solutions popping up. In fact, you can also get legal help from them to reduce the amount of taxes that you have on your estate.
5. Estate Planning is Not Just Will
Last but not least, estate planning is not just a will on a paper that tells how much property will go to which child of yours. It is a lot more. Many people are oblivious that estate planning involves even the appointment of lawyers and attorneys to distribute wealth. It also includes a medical surcharge paid from the fill and who will get what ratio.
Here are a few things that estate planning will highlight:
- Power of the attorney and their appointment.
- Responsibility of the family member that will be taking the financial decisions
- Medical treatment benefits, expenses, and the kind of treatment that will be offered to you in case you get incapacitated or go into a coma
- Beneficiary listing - Telling which child of yours will get profit from the stocks, which child will get the bonds, so on and so forth. If there are any siblings, cousins, or children or siblings or cousins that will inherit your wealth, they should also be listed in the will, and the ratio should also be mentioned properly.
- An average American has a life insurance policy, retirement funds, financial accounts, saving accounts, annuities, and residential property. These are just some of the things that you should plan for.
- Lastly, estate planning will help you reduce the amount of taxes your inheritors will have to pay. If you have paid taxes on your properties, it should be declared so that the state doesn't start demanding taxes after your demise.
Without an estate plan, the state will take things into its own hands. Your estate will be distributed based on your relations with the relatives. Your children will get the biggest share. If you have a spouse left in the world, they will also get a share. So on and so forth. The estate has taxes on all estate assets above 10,000 dollars.
If children are young, the probate court will appoint a legal guardian, usually a family member. If no family member is alive, a guardian such as a friend might also be granted guardianship. If no other option is left, the child may be declared a ward of the state and placed in foster care.
Your planning of the estate helps you raise your voice. It will help you plan everything from who will look after your child after you die to the distribution of your family assets.
It's also a good idea to name a backup guardian in case your primary pick is unavailable at the time of your demise. This will also ensure that all things are executed smoothly and that no family feud occurs due to an ill-adjusted estate plan.
We hope that you liked this article. These are all the top reasons why you need an estate plan as soon as possible. It will not only grant your children security, help you distribute your estate among them in the best way but will also give you complete peace of mind while on the death bed.