Why is Estate Planning Important?
As you go with your life, you will surely accrue a good amount of assets, family treasures, and wealth. But what will happen to all those if you become debilitated or die? This is where estate planning is critical because you can specify all your wishes and how you wish them to be carried out.
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A properly crafted estate plan will prevent disputes among the family members or heirs. It will also keep all the information about your family’s financial affairs private.
But creating an estate plan is not that easy and can be pretty time-consuming if you try and do it yourself. You should speak with an experienced financial planner and an expert estate planning lawyer who will do all the work for you and ensure everything is done properly.
Not planning your estate properly will cause your family and heirs problems and is why it is so important to create an estate plan.
Here are the important steps you must follow to create an estate plan:
Make an inventory of your assets and the things you owe
You must create an inclusive list of your debts and assets, including contact details, names of your advisors and account numbers. Put the summary in a central and secure location with all the actual copies of all the essential documents. Make additional copies of all the documents and store in other secure locations in case they’re needed.
You must provide a copy of your summary to the initiator of the will. You can keep this list in the form of a digital file or a piece of paper in a secure and safe place.
Create an eventuality plan
Professionals say the estate plan will enable the person you name to have full control over what will happen to the assets and property if he/she or their spouse passes away. It also helps in placing a documented plan in place if you become injured or weakened. Your family will proceed with all the affairs without going to court. This should also include the means to provide income if you become disabled and to cover for the expenses for your care.
Providing for dependents and children
The main objective for the majority of the estate plans is to protect your loved ones and their future requirements. The estate plan should contain provisions for all the children and must carry the guardians’ name for children below 18.
The estate plan should also address the income and care of the relatives of children who have special needs. This is something you must plan prudently to prevent risking government reimbursements. Make sure to speak with an estate lawyer regarding this matter to take the right steps now.
Protect all your assets
Protecting all your assets for your charitable legacy and your heirs is the main component when it comes to estate planning. You have to cover the estate taxes and reduce all the expenses while you meet all your objectives.
If needed, you should include in your estate plan some specific approaches for disposing or transferring assets such as investment property, family-owned businesses, stock within a closely held business or real estate.
Some people utilize their permanent life insurance and trust to protect all their assets while ensuring all future goals are met.
Document all your wishes
You need a legal document to indicate the manner you wish your assets are to be distributed. Doing so will ensure all those wishes are properly followed if you become incapacitated or die.
These wishes can include designating all the heirs for retirement accounts, life insurance policies, and other assets in line with your objectives. This also means all the material assets’ titles like property and automobiles are properly named.
You must work with your family lawyer to ensure you have an updated will disposing of all your assets and powers of attorney or POW for financial and healthcare-related matters.
Creating an estate plan is essential these days. You want to avoid potential probate or family disputes. The steps outlined are critical to help you create an effective and correct estate plan for your wealth and assets.