Estate planning essentially refers to planning that involves deciding inheritance in case of an individual’s unfortunate death. While parents spend a lot of time planning their family’s next vacation, which school district is the best, which vehicle would be ideal to drive kids to the school etc., little attention is given towards what would happened to family assets in case of the unfortunate death of one or both parents.
Estate Planning ensures that whatever you have worked hard for all your life, all your assets, property and cash, goes into the hands of your deserving children as per your liking. It is common misconception that estate planning is only for the rich – this could be far from true. If you own even one asset in your name, it is essential that you plan for it.
Estate planning is essential in order to dictate which of your off-spring or relative would inherit what and how much of your assets. In case of an unfortunate early death, estate planning helps ensure that your minors’ inheritance is safe and guardians are established to take care of your kids and their needs. Such planning also minimized the advent of a legal battle between families over who gets what, as that is already dictated. The following points detail the two main benefits and importance of estate planning:
1. Keeping beneficiaries and heirs protected:
In case of an unfortunate event in which the sole earner, or both earners of a family pass away, estate planning ensures that their kids and beneficiaries are protected financially. In many countries, in absence of a will, other family members such as siblings, aunts, or uncle try to step in and claim what is rightfully the children’s or the other spouse’s property. Even if relatives don’t step in, in the absence of a will the court will be responsible to dictate who gets what, and this process can essentially take years and would involve a lot of unnecessary legal fees. Estate planning ensures that no such mishap takes place, and the beneficiaries get what’s theirs rightfully so.
2. Keeping away taxes
Tax authorities in every respective country can be a pain for your heirs or beneficiaries if your estate planning doesn’t involve minimizing tax burden of your will beneficiaries. Minimization of taxes in this way can be done by a number of legally sound ways, and your concerned attorney or tax lawyer ought to direct you towards the best methodology.
In order to write your will and conduct sound estate planning, individuals need to realize that there are a number of steps they ought to undertake. The first step of this process is to come up with a strategy. The next step is to come up with a will that dictates who gets what and an executor would be responsible for its execution. The third step is to ensure naming the beneficiaries. This stands for all assets, property, cash and even insurance policies. While estate planning can be a stressful event for one and their families, they ought to realize the impending importance and crucial nature of this task altogether.