While it’s never one of the most enjoyable things to do, estate planning or deciding how your assets will be distributed after you pass is very important. However, today, even after factoring in the Covid-19 pandemic, statistics still find that about two-thirds of adults don’t have a will. For those who doubt the necessity of an estate plan, here are some top reasons that will convince you of its importance.
Prevent Family Wars
It’s not unusual for a family war to break out right after a beloved has passed away, and everyone wants a piece of the assets. On your end, the last thing you would want is for your assets to fall into the wrong hands after you pass. You also don’t want the people you love squabbling over your assets, as this can destroy relationships.
Your loved ones may even end up resenting you for not making the necessary provisions and creating confusion in the family. Many family wars have taken several years to resolve in court when all that was needed was an estate plan.
Do you have young children and others that depend on you? Then you will need to do some estate planning, so you can single them out as heirs to your assets. If you’re the breadwinner in your family and you pass on without deciding who gets what, then you’re leaving control over to the courts.
This doesn’t always guarantee a perfect outcome because the court has no way of knowing your wishes. Estate planning also allows you to name your children’s guardians, so they’re still well cared for after you pass.
Lessens the Tax Burden
After you pass, your remaining assets will be taxed by the Federal Government. However, existing estate planning laws allow your heirs to inherit a portion of your assets that’s exempt from taxes. With the help of a trusted and qualified attorney, you’ll be able to transfer assets to your heirs in a way that minimizes the estate taxes they’ll have to meet.
It’s possible to reduce the income taxes your beneficiaries will owe the IRS. This gives your beneficiaries enough financial cushioning and ensures they enjoy their inheritance without giving up a big chunk of it.
In conclusion, estate planning is an essential process that ensures the straightforward division of your assets while creating minimal confusion and rifts between family members. It also protects your heirs against owing a lot of taxes. Overall, estate planning honors your wishes and enables you to do what you believe is best for your beneficiaries.