Estate planning is not popular with a good number of people for some reasons. While some put off the idea because they don’t own estates yet, for others, the inevitability of passing away is still a tough pill to swallow.
What you may not understand is that this plan determines how your assets will be handled and who will inherit them. An estate doesn’t only refer to your buildings. All your valuables, including your furniture, car, accounts, and investments, make up your estate.
To this end, you need to make plans for the management and transfer of your assets when you pass away. This article will shed more light on the importance of this project.
Definition of estate planning
Estate planning refers to all the preparations you make in your lifetime towards the bequest of your valuables at death or incapacity. One major objective here is to minimize conflicts that may disrupt the smooth transfer of assets.
Estate planning is a way to provide for your loved ones without putting them through physical and emotional stress. There are many estate planning vehicles, but the most common ones are the will and living trust. While they are similar, they don’t serve the same purpose. You should consult with a legal professional to make a choice that meets your needs.
Who needs estate planning?
Your notion of estate planning may be wrong. It is not only for the aged and dying, as you believe. As I said earlier, death can happen at any age; some people pass away even before retirement.
Also, you shouldn’t wait until you are extremely rich to make plans for asset transfer. As long as you have something of value, be it cash or liquid assets, estate planning should be your concern.
If you are waiting for the right time, you should act immediately to avoid being caught off guard. Another reason to make a plan is to discourage court involvement when you’re unfit to conduct business.
The courts can help you out, but you should make your plans. A probate process can be embarrassing and exhausting, not to mention the fortune your heirs will spend to access your assets.
To avoid this, you can reach out to your legal advisors and asset managers to show you how to create a bulletproof estate plan. Your decision provides benefits in your lifetime and caters to your survivors when you die.
Benefits of estate planning
Making early arrangements for the disposal of your assets provides many benefits. When you are aware of these benefits, then you can treat this plan as a priority. Here are some benefits of estate planning.
- Catering for your heirs: In addition to providing for your family financially, estate planning reduces stress and trauma. With a plan in place, your beneficiaries will receive financial support without losing their minds.
- Business succession: It helps business owners make plans for the management of their business and future successors. In the event of your passing, your business won’t collapse from poor administration.
- Flexibility: Depending on your type of trust, you may enjoy a flexible arrangement. For example, a revocable trust can be changed when your situation demands.
- Protection: Estate planning protects your assets from foreign interference including the court, Internal Revenue Service, and creditors. In addition, it protects your beneficiaries even the underage children among them from conflicts and chaos.
Conclusion
To conclude, the ultimate benefit of this goal is the personal satisfaction you get from deciding who inherits your assets. You can rest easy knowing you have eliminated the possibility of conflicts when the time to distribute assets comes.
