The Importance Of Estate Planning
When it comes to estate planning, it isn't really all that high on people's lists of things to do. Most know it is important, but the thought of planning who gets what after passing away isn't very enjoyable.
Some think that estate planning is really only for those people with a lot of money and assets. The truth is, every person can benefit from estate planning. Here is a closer look at a few reasons why estate planning is so important.
Control The Beneficiaries
The number one reason why estate planning is important just comes down to controlling what happens after death. Beneficiaries can be declared, and all assets can be divided the way a person wants.
Alternatively, the only way assets can be divided up is to use the court system if there is no plan in place. This process is long, drawn out and as mentioned below, sometimes messy.
While alive, controlling the plan just makes so much sense. Everyone should be in complete control of their money while alive, and also when they pass away. To forfeit that opportunity is just puzzling.
Limit Family Arguments and Issues
After the grieving process is over, it is actually pretty common for families to have arguments or issues if there was no estate planning done. Why have them deal with that? Have everything set up and taken care of so that this does not end up ripping a family apart.
Without any type of planning, arguments and issues with family members can end up putting loved ones in court. No one really wants that to happen just because of a lack of organization. Thanks to just a little bit of planning, everything can be avoided.
Help Heirs With Taxes
Taxes can be extremely difficult to sift through when it comes to assets are being passed down to heirs. In many cases, a financial advisor will be able to provide assistance when it comes to the best possible plan. The goal is usually to have the smallest tax burden possible so that they can keep a lot more than they give to the government.
The things to really watch out for our estate taxes and inheritance taxes. Estate taxes will be from the federal and state, while inheritance taxes are just from the state. Planning ahead of time can end up saving a decent amount of money.
Ideally, estate planning is something that is done but is not really needed until a person is very old. The reality is that there are times in which people do die young, and that makes estate planning even more essential. This is when the will portion of the estate plan will kick in.
The will is very important because it will allow a person to name the guardian if both parents happen to die. Any child under the age of 18 is going to need a guardian, and the court system will assign them one if it is not named in a will.