Is it essential for everyone to do estate planning?
It is often believed that estate planning is for the rich and wealthy. However, this does not hold true. Estate planning is a critical component of financial planning that every individual must consider. It decides who will inherit all your financial assets, property, and other things after your demise. Every individual can benefit from estate planning. It has nothing to do with your financial status or age. However, people often neglect this important part of financial planning. You have worked hard to earn the assets that you have today. Therefore, you must ensure it is handed over to safe hands.
Estate planning under the guidance of an Estate Planning Attorney is important for everyone because:-
It is more than a Will: People often confuse a will with an estate plan as both are instructions on how your assets and property will be handled and passed on to your legal heirs after your demise. However, estate planning is a much broader term. It also includes many other things like –
- Power of attorney where you can appoint one of your loved ones to make medical and financial decisions on your behalf if you are incapacitated
- Medical directives mention instructions on what treatment you will be given in case you are incapacitated
- Trusts to pass on property to your legal heirs which will provide tax benefits to you and your beneficiaries
- Beneficiary designations will mention who will receive money from life insurance, retirement accounts, annuities, etc.
Saves time and money: If you pass away without leaving behind an estate plan then the state now decides what happens to your assets. A probate court will appoint a representative for asset distribution. Once the case goes to probate, it can take months and years for a verdict and the process gets complicated. Your family will not be able to touch a single piece of money till the case is in probate.
Avoids huge taxes: An estate plan helps you avoid huge taxes by setting up one or more trusts and ensuring your assets and property pass on to the beneficiaries without the state and federal government taking away a huge part of it through taxes.
Protects your children: If you pass away leaving behind your children, having an estate plan will ensure they are protected. You can mention a guardian for your kid in your plan. If not then the state will decide who will take care of your child.
Estate planning should be taken seriously. Your hard-earned money should be allocated to your heirs in the right manner after you pass away. To ensure this happens, you must hire an expert estate planning attorney. An estate planning attorney will create the right estate plan for you and personalize it based on your needs and family situation.