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You’ll need an estate plan if you want to protect your assets and your loved ones after you’re gone. Proper estate planning is a way of ensuring that you have control over the distribution of your assets.
Do you have an existing estate plan? Chances are you don’t have one. Most people don’t think about estate plan, let alone go out and work with an estate planning law firm, like Mile High Estate Planning, to establish one for themselves. The misconception that estate planning is only for the rich and wealthy is part of the reason why.
The truth is that estate planning is essential for everyone’s financial future. Here are the top six reasons why it’s important:
It’s essential to know what you currently have in terms of debts and assets to develop an achievable and accurate plan for the future. That’s why estate planning involves a comprehensive analysis of your present financial situation. You’ll usually start by gathering any document you have with respect to each debt and asset. Include real estate appraisals, investment documentation, and bank statements. You can also add value approximations regarding other assets you have. If you have high-value personal items that you want to give to others, write down a list of them as well.
Your assets will be distributed according to your state’s laws of intestate succession if you die without an estate plan. Following intestate succession laws means particular members of your family will receive your assets. However, your assets will be acquired by the state if it can’t find appropriate family members. Having an estate plan would allow you to leave assets only to the ones you truly love and care for, may it be a parent, sibling, child, significant other, or a friend.
Making sure that your estate doesn’t go to probate is one great way to help avoid disagreements in your family. What’s probate? It’s a legal process that’s supervised by the court. It authenticates your will if ever you’ve made one, assessing your assets’ value and paying off your remaining bills and taxes. The court will, then, identify people it deems to be your rightful heirs and distribute whatever is left of your hard-earned assets to them.
Wills and trusts are two major pieces of an estate plan. Trusts can help enforce your wishes long after you leave this world, while wills help in explaining the instructions you wish your beneficiaries and heirs to follow once you’re gone.
However, an estate plan includes other things that are handy for your future. It isn’t limited to just the two items above. It also consists of the following:
If you’re unable to do so, a power of attorney is a legal document that outlines who could step in to represent you in financial, medical, and legal matters. Old age, injury, and illness are some of the reasons that might make you unable to decide on your own.
An estate plan should also include healthcare proxies or an advanced healthcare directive stipulating how you’d like to receive treatment in the event that you become incapacitated even if you’re still alive. A “Do Not Resuscitate” order and other instructions regarding your health could be included in these documents.
Your heirs or your assets aren’t the only ones protected when you have a complete estate plan; you become protected, too, even when you’re still alive.
Following death, most of the money an individual’s estate loses goes to taxes. It’s contrary to popular belief that estate money is spent on legal fees. That’s why hiring skilled accounting professionals and an experienced estate planning attorney is essential. They can help you cut taxes payable by your estate, which includes those from an inheritance, as well as federal and state governments. To make sure that those you love and care for will inherit as much as possible from you, meeting with an attorney who specializes in estate planning is essential. An estate planning expert will help you set aside as many assets as possible for eventual distribution while assisting you in caring for your family now.
Another major component of estate planning is protecting your finances or assets. That’s why it comes in handy against creditors. For instance, when an unforeseen lawsuit comes up in the future, it can help protect your estate. If you work in the field of medicine or residential or commercial real estate, estate planning is especially helpful since these industries often encounter litigations.
Your family’s future will benefit from estate planning. You’ll need a comprehensive one in place if you want to ensure that you can leave anything behind for the people you love. Rather than leaving the distribution of your assets up to the court, it specifies who gets what. Your family could end up facing major tax expenses and the burden of a court battle when you don’t have a plan.
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