It seems as though the general public is consumed with planning for their everyday life, but many overlook the future. Planning your assets’ future and who will receive it is extremely important to do, even though it may not be fun to think about what will happen after you pass. A common misconception is that estate planning is only for the wealthy or for those who have many assets to sort through, which is entirely false. You don’t have to be rich to plan your estate’s future because, regardless, your assets will be divided among your loved ones. Without planning for the future, it can have costly and long-lasting ramifications for your loved ones, even if you don’t have millions to pass on. If you aren’t convinced, here are some reasons why you should have an estate plan to avoid devastating consequences for your heirs:
- Your Beneficiaries are Protected
Regardless if you are wealthy or middle class, having an estate plan can protect an unnecessarily drawn-out process. Even if you are only leaving behind a small property, it is essential to designate who will receive it because otherwise, you have no control over who will gain control of the property.
The main component of estate planning is designating heirs for your assets, regardless of the property’s size or the amount of money. Without an estate plan, the courts will often be the ones to decide who receives the assets, which can take years, be extremely expensive, and get quite ugly. The courts have no idea which sibling is the best suited to take control of the estate, and they will not rule that the surviving spouse gets everything, so it is best to plan.
- It Will Protect Young Children
No one will ever think that they will die young, but you need to prepare for the unthinkable if you have small children. This is where the Will portion of the estate plan comes in. To ensure that your children are adequately cared for by someone you approve, you need to name their guardians if both parents pass before they turn 18. Without a Will that names the guardians, the courts will step in and decide who will raise your children.
- Spares Heirs of a Big Tax Bite
The entire idea about estate planning is that it protects your loved ones, which also means giving them protection from high taxes. An essential part of estate planning is transferring assets to heirs to provide them with the smallest possible tax burden. By creating an estate plan, you can reduce or eliminate all of their inheritance taxes and decrease the income tax they might have to pay. Without a plan, the amount your heirs will owe to the government can be quite a lot.
- Eliminating Family Drama
We have all heard of the horror stories between family members when someone with money passes away. Someone may feel they deserve more than the other, or one may think they should be in charge of the finances even if they are terrible with money. This can get quite ugly in court and can pit family members against each other, and while estate planning does not guarantee that it can still get ugly, it does eliminate some of the drama. Not only is estate planning good for stopping fights before they start, but it also allows you to make individualized plans for any of your children if you want to set up a trust for one of them to inherit a lump sum.
Deciding on whether to divide your estate equally is one of the tasks you need to think through. As well, if you have had more than one spouse and children from more than one family, an estate plan is essential and urgent.
The Bottom Line
If you want your assets and loved ones protected when you are no longer able to do so, you will need an estate plan. Without one, your heirs could face enormous tax burdens, and the courts can designate how your assets are divided up. They can even decide who can raise your children if they are minors at the time of your passing. Now that you have seen our reasons for why estate planning is essential, we hope you look into how to get one started if you don’t have one already.
At JC Legal Solutions, we specialize in Wills and Estate planning, one of our friendly and knowledgeable team members would love to help walk you through the process and help you plan properly for the future. Contact us today for more information!