If you neglect timely estate planning, your beneficiaries might not benefit from the wealth you have worked hard to accumulate. An estate plan makes a lot of sense, whether you have high-end items or not. An estate is whatever you own, whether that's furniture, life insurance, bank accounts, personal possessions, or other investments. Estate planning involves more than just writing a will. If you are creating an estate plan, here's what you should know about it.
It Doesn't End in Writing a Will
Writing a will helps guide the estate distribution process. But you should know that a will is different from an estate plan. Of course, they both indicate how your possessions and assets should be handled and distributed after your death. However, estate planning goes beyond what is prescribed in a will. That's why you need an estate planning lawyer to help you make decisions that will adequately meet your financial and medical needs.
The medical directives indicate the kind of medical attention or treatment you should get if you become incapacitated. You should also consider beneficiary designations, where you indicate who should benefit from your annuities, retirement accounts, and life insurance, among other financial accounts. Trusts could also help your beneficiaries enjoy tax benefits.
It Helps Save Valuable Time and Money
People who die before they write a will expose their family or beneficiaries to a lot of problems. And since there is no clear indication of how your assets should be distributed, the law takes over. Here, the court determines who takes which property and names a representative to distribute your estate according to what the law says.
The surviving spouse, in most cases, serves as the representative. But if you have no spouse or a close relative that the court can trust, the court will consider getting a public trustee to oversee the distribution process. All this takes a lot of time. If probate is involved, the process will cost more money, particularly on court appearances and paperwork. So it's crucial to invest in timely estate planning to avoid all these hitches.
It Helps Your Beneficiaries Avoid Overwhelming Taxes
You definitely protect your beneficiaries from tax problems by creating a timely estate plan. You, therefore, need to create one, especially if your estate's value is higher than what the federal law stipulates. This prevents your heirs from paying hefty taxes after your death. You can set up joint accounts, make irrevocable gifts, or establish trusts. By so doing, you will help your heirs avoid overwhelming tax issues.Share