The idea of “estate planning” can be a bit intimidating for some people, which is unfortunate since the main reason of doing so is making sure your loved ones are provided and cared for.
Another misconception of estate planning is that it is only for the elderly, however, if you are a parent with children who will need care and direction, it is better to start planning your estate earlier in case you suddenly become incapacitated or worse.
Estate planning needs to be factored into your overall financial plan, along with your children’s college tuition and your retirement needs in order to be really effective. Your estate consists of all your property, which includes your home, personal property like cars and furniture, and intangible property like insurance, stocks and bonds, bank accounts, and pension and social security benefits.
If you die without a will, your property will still be distributed, and essentially, by not leaving a valid estate plan, state law will end up writing your will for you. So what can estate planning do for you?
Provide for your immediate family
A good estate plan makes sure that your spouse and loved ones are provided for. Couples with children can ensure their education and upbringing is not left to chance. For children under 18 years of age, both you and your spouse should have a will that nominates personal guardians for them. If that is not specified, a court would have to decide where your kids will live and who will make all important decisions for them regarding their money, education, and way of life.
Provide for other relatives who need help and guidance
If you have a family member, such as an elderly parent or disabled child, whose life would become more difficult without you, establishing a special trust fund would be a good way to ensure their future.
Get your property to beneficiaries quickly
By planning ahead, you can make certain that your beneficiaries receive the property you’ve left them promptly and without unnecessary expenses and court interference.
Plan for incapacity
Use living wills and durable powers of attorney to plan for possible mental or physical incapacity; pick someone you really trust to make important health and financial decisions for you in the event that you are incapable of doing so for yourself.
Estate planning can reduce the expenses associated with transferring property to beneficiaries, such as probate costs, and by reducing these expenses you will be leaving more to your loved ones.
Choose executors/trustees for your estate
By choosing competent executors/trustees, you can save your estate money, reduce the burden on your survivors, and simplify the administration of your estate.
Ease the strain on your family
You can take a lot of the burden off your grieving loved ones by planning ahead for funeral arrangements and other expenses, and by letting your loved ones know how you want your affairs to be handled so they do not have to deal with unnecessary added stress.
Help a favorite cause
Your estate plan can help support religious, educational, and other charitable causes, either during your lifetime or upon your death, and at the same time take advantage of tax benefits designed to encourage charitable giving.
Reduce taxes on your estate
The idea is to get the maximum amount possible to go to your loved ones and designated beneficiaries. Properly planning your estate can help you with that, giving the maximum allowed by law to your beneficiaries and the minimum to the government.
Make sure your business runs smoothly
If you have a small business, the operation could turn to chaos without you there to guide it. A good estate plan can provide for an orderly succession and continuation of your business affairs by spelling out what will happen to your interest in the business.
Consulting an elder law attorney, such as Adam Tobin, could prove very helpful when it comes to planning your estate. Contact Adam Tobin to get helpful advice from a knowledgeable estate planning attorney.