No one really likes to spending time thinking about when they will no longer be on this earth to enjoy their family and friends, but it is a reality that we all will face. One of the best things an individual can do is have their financial affairs in order so their family does not have to deal with them along with the grief they are already experiencing. In this article I would like to share some reasons it is important to have an estate plan before you die.
1) You should have an estate plan to avoid probate.
What is probate you might ask? Probate is when a court-supervised process takes place to locate and determine the value of the assets that were owned by an individual. For instance, the court will see to it that any expenses outstanding are paid, and if any resources are still left over, it will be distributed to the decedents or heirs. Who in a grieving really wants an outside, court-appointed advocate to tell them how to disburse of their loved one’s estate.
2) Have an estate plan to reduce estate taxes.
A significant amount of money can be lost if an estate is left vulnerable to state and federal or inheritance taxes. Through some simple planning or assistance from and estate planning lawyer, most couples can eliminate or drastically reduce estate taxes.
3) Have an estate plan to avoid complications.
An estate plan will avoid unnecessary family squabbles over who pays for what, who gets what and when they get it. These types of issues can pull an already stressed family apart and cause further pain and suffering that the deceased never would have intended. We have all seen or heard of families tying up an estate in court for years over petty disagreements.
4) Have an estate plan to protect beneficiaries.
There are generally two reasons why an estate plan is created to protect beneficiaries: a) in protection of minor beneficiaries, and (b) protection of beneficiaries from bad decisions, outside and influences and divorcing spouses. In all 50 states, if the beneficiary is a minor, a guardian or conservator will have to be appointed to oversee affairs on the minor’s behalf. An estate plan in these instances will protect beneficiaries form themselves or those who may try to take advantage of them and their newfound fortune.
5) Have an estate plan for protection from creditors.
Becoming increasingly popular is asset protection planning. It is coupled with estate planning to protect assets from lurking creditors. It is important that this plan is already in place before any problems start. It can benefit the holder in life and their families in their passing. Protections for spouses, such as AB Trust, can be created and ABC Trust or lifetime trust for other beneficiaries.
You have worked hard to accumulate money, property, shares, etc. in your lifetime. Don’t let the government come and tell your family what can be done with it. Take the time to meet with an estate planner today.