8 Estate Planning Benefits
Estate planning protects you and your family. This protection becomes necessary if you become incapacitated, or when you pass away. Many issues should be addressed in a well written plan. The following article lists a few of these essential points.
#1. Providing for Your Family
When a loved one becomes incapacitated or passes away a family is under a great deal of stress. This is not the best time for the added burden of financial stressors. Prior legal planning assists a family during this difficult time. A properly written plan ensures access to monies to pay bills, and settle estates quickly. Additionally, guardianship of minor children is part of an estate plan.
If you have children, it is crucial that your plan has provisions to provide for them as you see fit. So, a guardian should be appointed in your estate plan. Without a plan in place the court is left to make those important decisions for you. Consequently, guardianship must be addressed if minor children are part of the family.
#2. Property Distribution
Another benefit is the ability to quickly distribute property to heirs. A number of methods can help with this process including: insurance with benefits paid directly to beneficiaries and a number of trust options. An estate plan evaluates all assets including life insurance policies and retirement plans. An experienced elder law attorney can assist with making sure beneficiaries are up to date on all policies and plans. Thus, it’s important to evaluate all financial aspects in an estate plan.
#3. Difficult Decisions
In addition to financial concerns, health and end of life wishes should be addressed. An attorney can provide necessary documents to be signed and notarized which express your wishes regarding medical care. For example, if you are in a catastrophic accident and brain dead; do you want to be kept alive with machines? This is a horrible decision facing families during a tragedy. Prior planning and legal documentation takes the burden out of your family’s hands and gives you control. Of course, that is an extreme example and various other medical decisions often occur, especially for the elderly. It’s important to protect yourself and clearly state your wishes ahead of time.
Estate planning also allows you to create an individualized memorial and funeral. For example, some people prefer a celebration of life over a mournful gathering. These wishes should be expressed to one’s family and stated in the plan. Also, choosing to be cremated or buried, a religious burial, or a secular service and other specific details may be outlined in a plan.
#4. Reduce Taxes
An estate plan usually includes a will and a trust. An estate planning lawyer will explain the different types of plans and how to reduce inheritance taxes. Many people set up estate plans to avoid losing their hard earned life savings to taxes.
#5. Minimize Expenses
In addition to reducing taxes, a good estate plan saves money in other ways. When a person passes away without an estate plan, all property must pass through probate court. When this happens, families must hire lawyers and pay court costs. While this lengthy process drags on, property taxes, utility bills, home maintenance, etc. costs escalate on the deceased one’s property. In other words, spending the money up front saves money in the long run.
#6. Support a Charity
Some people want to leave funds to a particular charity when they pass away. This may be stated in an estate plan.
#7. Choose an Executor
Another advantage of having an estate plan is you choose the executor ahead of time. An executor is a person, or an institution that carries out the terms of your will or estate. It’s important to choose a trustworthy person and a second person (in case the first one is incapacitated). Generally, one person is the executor and/or power of attorney for financial matters and another one for health decisions. Your attorney will discuss this matter with you and provide all necessary documents.
#8. Business Concerns
Business owners must have an estate plan. Without one, a business may fall apart if you become incapacitated and/or pass away. It would be a financial and legal nightmare if you left this issue to your family. Therefore, setting up an estate plan is vital for all business owners.
In summary, estate planning is a vital part of creating a plan of action for your untimely passing or inability to care for yourself. Creating a will and/or a trust is not always enough when it comes to preparing for your future. These plans protect you, your family, your assets, and provide you with a peace of mind.