While the term estate is usually associated with the wealthy, estate planning is not only limited to rich people. Every individual, regardless of their financial status, can benefit a lot from estate planning. Here are some of the benefits of estate planning.
Estate Planning Enables Your to Protect Your Beneficiaries
An estate plan allows you to designate an heir for your belongings and properties. If you were to die without doing so, there would be so much chaos, and the people you worked hard to protect might be left with nothing. Even if you are leaving behind your home only, you need to decide who is going to inherit the property and ensure that it’s left to that person.
Without an estate plan, your assets will probably end up being distributed by the courts. This is a long process, and it can be quite costly. Apart from that, it can even create divisions between your loved ones. After all, the courts won’t be able to know who you trust to manage your estate. They can end up giving everything to someone who will squander cash irresponsibly.
An Estate Plan Minimizes Transfer Taxes
This is yet another benefit of an estate plan. If you have accumulated a lot of wealth over the years, and you plan to leave it to one of your relatives when you die, an estate plan will enable you to process the transfer in the most tax-efficient way possible. When transferring your wealth to someone else, there are three types of taxes to consider. This includes the estate tax, gift tax, and generation-skipping transfer tax. With the help of a good probate attorney, you will be able to come up with a clever wealth transfer strategy that will help minimize taxes owed by you to the state. This is why, according to Advance Capital Management, 74% of Americans would be more likely to create an estate plan if it enabled them to lower their families’ taxes.
An Estate Plan Protects Your Wealth From Being Squandered
There’s really no knowing how your loved ones are going to behave after you die. A lot of people tend to make unwise decisions once they land their hands on large sums of money. This is why you need to leave a plan for how that wealth will be used. This will ensure that all your inexperienced beneficiaries spend their share of their inheritance wisely. For instance, they can use it on education, a home, and other investments.
A good estate plan can give you peace of mind. However, you need to ensure that the estate plan is created properly and that you appoint a reliable probate lawyer to oversee your estate. If you need to find a good probate attorney, you can search online or look for referrals from your friends and family.
