A well written estate plan provides protection to an individual’s most important assets – their children, spouse and greater family. This protection becomes necessary in the event an individual becomes incapacitated, or passes away. In these situations, an estate plan can have many benefits.
Consulting with an experienced attorney specializing in estate planning can help create a well written plan that guarantees the best outcome possible for an individual and their family. Below is a list of eight of the most important benefits of a well written estate plan.
#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 estate plan ensures access to monies to pay bills and settle estates quickly. Additionally, estate plans include guardianship of minor children. This is crucial if an individual has minor children in their family, as provisions for their care is included within estate planning. Without a plan in place the court is left to make those important decisions, which is not desirable.
#2. Property Distribution
Another benefit of estate planning is the ability to quickly distribute property to heirs. There are different estate planning methods that can help with this process. These include things such as the setting up of insurance that directly pays benefits to the estates beneficiaries as well as the setting up of a number of trust options. Additionally, an estate plan evaluates all assets including life insurance policies and retirement plans, and ensures they are set up in the best way possible for quick and efficient distribution.
#3 Difficult Decisions
In addition to financial concerns, health and end of life wishes should be addressed in an estate plan. An attorney can provide necessary documents to be signed and notarized which express an individual’s wishes regarding medical care in the event of an accident or tragedy. Prior planning and legal documentation through estate planning takes the burden out of your family’s hands and gives the individual control over the decision making 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 estate 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 Reduction of Taxes
An estate plan will almost always include a will or a trust. If done correctly, an estate plan can reduce any tax liabilities from inheritances and gifts. In fact, the primary reason individuals set up estate plans is to avoid losing their hard earned life savings to taxes and ensure their heirs receive their inheritance in tact.
#5 Minimize expenses
In addition to reducing taxes, a good estate plan saves money in other ways. It can prevent the estate from passing through probate, which costs a significant amount in court fees and attorneys. Probate also takes a considerable amount of time to complete, which means property taxes, utility bills, maintenance costs and other associated real property expenses can add up while the estate is being settled through probate. When a well written estate plan is in place, it prevents most if not all of these unnecessary expenses and wasted time on the part of all parties involved.
#6 Supporting of Charities
Some people want to leave funds to charities when they pass away. This may be stated in an estate plan, which will ensure the funds are distributed according to their wishes.
#7 Choosing an Executor
Another advantage of having an estate plan is that the executor can be chosen 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.
#8 Business Concerns
It is crucial that business owners have an estate plan. Without one, a business may fall apart in the event the owner becomes incapacitated or passes away. When this happens it creates a financial and legal nightmare for the owners family. Setting up an estate plan prevents this and ensures the business can continue functioning if something unfortunate were to happen to its owner.