The importance of having an estate plan in place.
Estate planning may not seem like a fun thing to think about. Trying to decide how everything we have worked so hard for will be divided when we pass. We would much be spending our time doing fun things with our family now while we are with them. However, it is very important to ensure that you have an estate plan in place so that the ones you intend to take over your estate will be able to. Without an estate plan, you will have no control over what happens to your estate when you pass.
Here are four reasons why estate planning is so important.
1. Prevents those not intended to inherit your estate from being able to have access to it.
In the past estate planning was usually only considered by those that have a high net worth. Nowadays it has changed to even middle-class families are starting to make plans for their estates. You may only be leaving a second home or a piece of property you purchased for an investment, but when you pass if you do not have an estate plan in place, it could end up going to someone that you did not intend to have it.
The main part of an estate plan is to name those that you want to have certain aspects of your estate. If there is no plan in place your estate could end up in the courts and this could take years to be settled. If you have multiple children, but only one or two of them have been helpful and you wish for them to inherit more of your estate, the courts will not know this. Or if you wish for your spouse to take over your estate, the courts may not automatically rule in your spouse’s favor.
2. Protecting your children after you are gone.
When you start your family, the last thing you want to think about is dying. The thought of not being around to watch them grow up is often sad and unthinkable. Unfortunately, there are times when this happens. It is your job to make sure that even if something happens to you your children will be taken care of in a way that you want them to be taken care of. This is where having a will in your estate plan comes into play. In your will, you will have the ability to name who you want to be the guardian of your children if something happens to you. The guardian will be responsible for raising and taking care of them until they reach the age of 18. If you do not have a will in place, the courts will decide what happens to your children. They may go to close family or foster care. You know how you want your children to be raised and who you feel comfortable with being able to do this.
3. Protect your loved ones from the hassle of the IRS.
When creating your estate plan, you are doing this protect and benefit your heirs. Doing so also means protecting them from any problems that could arise with the IRS doing the distribution of your estate. In order to do this, it is important to transfer your assets to your heirs in a way that will create the smallest tax burden possible.
4. Stop family drama before it starts.
When a loved one passes and there is no will or estate plan in place the family might start to argue over who should get what and what should be done with certain properties. There are always those horror stories of how families have been torn to pieces over where all the money will go when their loved one passes. One family member may think they are entitled more for one reason while the other is convinced they deserve more. With an estate plan and will in place, this will keep all of the family fights out of it. They will be able to see in writing what you want to be done with your property and/or money.
The bottom line of estate planning.
You want to make sure your estate is going to the person/s you want it to go to. The only way to do this is by making an estate plan and will. Without them, you have no control over anything once you are gone.
For help planning your estate contact Bird and Fugal. With their help, you will be able to ensure that your family is taken care of the way you want and your estate won’t end up in the courts or being fought over.