Estate planning may be very popular in the modern age that we are. However, it is sad to find out that a lot of people have refused to create an estate plan. Each day, people die without creating a will, thus, leaving their family with the tedious task of scrambling for their assets.
You should plan your estate regardless of how rich you are. If you don’t own a Lamborghini or Ferrari? No problem! You can still plan your estate. If you don’t own a pent house in the city of New York, no problem, you can still plan your estate. You can plan your estate even if you aren’t as rich as the richest men in the world. Estate planning is for all! If you fail to plan your estate, you may regret it.
Before we talk about the importance of estate planning, why we don’t refresh our minds on what estate planning is all about.
Estate Planning
As I said, estate planning is a very popular word. However, it is unfortunate that a lot of people don’t know what the plan entails, neither do they have an estate plan. Estate planning, in simple terms, is the act of preparing for the transfer of an individual’s wealth and assets after his or her death.
What are assets? You may ask.
You see, assets are anything of monetary value owned by an individual or a cooperation. Examples of assets are bank accounts, real estate, investment accounts, stocks, bonds, cars and trucks, boats, airplanes, including business interests.
More about Estate Planning
After your death, your estate will be managed and distributed based on your wishes, provided you created an estate plan. Things that makes up your estate are your assets, life insurance, pensions, real estate, cars, personal belongings, and debts. An estate plan must be written, signed, and notarized by the owner of the estate.
An estate plan is often created with the help of an estate planning lawyer. If you reside in Brooklyn and wish to plan your estate, don’t hesitate to contact an estate planning lawyer, Brooklyn.
Why is this Plan Important?
- Estate Planning Prevents Unwanted inheritors
Like it or not, your state could have an already-drafted will for you. Or if you die intestate (without a will), your state will designate beneficiaries on your behalf. In several states, your assets will be shared based on the intestate law of the state. In that case, there is a possibility that your wealth could be transferred to unintended beneficiaries. An estate planning lawyer can easily fix this issue. He can make sure that your property goes to your intended inheritor’s hand.
- It helps reduce estate tax
Federal estate taxes or state inheritance tax could slash your wealth significantly. It could be a terrible burden to your beneficiaries. You can reduce or in some cases eliminate estate taxes by creating a trust. In addition, you can as well adhere to some estate planning strategies to make the tax less significant with the assistance of a professional estate planning lawyer.
- It protect young inheritors
The age difference between parents and children is often significant. Thus, there is a huge possibility that they may leave this world before their children. So, the best way to ensure that their children, especially minors, are well catered for after their death is to create a perfect estate plan.
As a parent, you know what is best for your children. You can designate a guardian for them in case you kick the bucket before they become adults. If you die without a will, the court would designate a guardian for your children who will cater to them as they deem fit.
- Help prevent probate
A lot of beneficiaries and estate executors dislike the probate process and this is because it can be time-consuming, stressful, and very expensive. The probate process could take weeks, moths, or even years.
Probate is usually done to validate your will, estimate the value of your estate, settle any unpaid taxes and bills and share your remaining assets to the designated beneficiaries.
Probate is more terrible than it sounds. And the best way to ensure that your beneficiaries don’t go through the difficulties that comes with probate is by planning your estate. A trust, specifically, can help you prevent this process.