Many people devote more time to choosing a car to buy, planning a vacation, or even selecting a place to eat dinner than they do to estate planning—deciding how their assets will be managed after they’re gone. It may not be as fun as checking out restaurant reviews or booking a trip, but without proper estate planning from a wealth solutions firm like Ora Partners Limited, you can’t choose who gets the assets that you worked so hard for.
Estate planning isn’t only for high-net-worth individuals. Without a plan in place, settling your affairs when you’re gone could have a costly and long-lasting impact on your loved ones, even if you don’t have an expensive home, valuable art, or a large IRA to pass on. Still not convinced that an estate plan is important? Consider these four reasons and avoid potentially devastating consequences for your heirs.
An estate plan protects your beneficiaries
Estate planning was once considered something that only wealthy individuals could afford, but that has changed. Nowadays, even middle-class families need to plan for when something unfortunate happens to a family’s breadwinner. After all, you don’t have to be rich to do well in real estate or the stock market, both of which produce valuable assets that you’ll want to pass on to your heirs.
Even if you’re only leaving your home behind, if you don’t decide who gets the property when you pass away, you and your heirs won’t have any control over what happens to the asset.
Without an estate plan, the courts will decide who gets your assets. This process can take several years and rack up fees. After all, a court doesn’t know which one of your children has been responsible and which one shouldn’t be given free access to cash.
An estate plan protects young children
Nobody wants to die young, but if you’re the parent of young children, you have to prepare for the unthinkable. This is where estate planning comes in.
To ensure that all your children are cared for, you’ll want to name their legal guardians in the event that both their parents die before they turn 18. Without a will that names guardians, the courts have to step in to decide who will raise your kids.
An estate plan can help reduce taxes
Estate planning is about protecting your heirs, which means, in part, protecting them from the Internal Revenue Service (IRS). Essential to an estate plan is transferring assets to heirs. Estate planning aims to create the smallest possible tax burden for them.
Estate planning can enable married couples to reduce much or even all of their estate taxes, federal taxes, and state inheritance taxes.
An estate plan eliminates family disputes
You’ve heard all the horror stories. A wealthy family member dies, and the war between members of the family begins. Family disputes can get ugly and end up in court, with your loved ones pitted against one another.
Stopping fights before they even begin is yet another reason why estate planning is necessary. An estate plan allows you to choose who controls your assets and finances if you become incapacitated or after you die. This will go a long way toward quelling any family disputes and ensuring that your finances and assets are handled in the way that you intended.