3 Essential Reasons To Consider Estate Planning
It's a fact of life that everyone will one day die. Unfortunately, most people don't think about it until they start getting older and realize how much their lives have changed in a short period. To prevent death from catching you unawares, you should make sure your assets go where they should and consider estate planning. This article discusses three essential reasons why this type of planning matters.
1. To Protect Your Heirs from Additional Taxes
When transferring assets to your beneficiaries, you should ensure they incur the least amount of tax as possible. Failure to plan your estate may result in the transfer of your assets being taxed at a higher rate. Some taxes that could be incurred upon transfer include federal estate tax, federal income tax, and state inheritance taxes.
An estate plan will ensure that your heirs receive the full amount of assets without having to pay additional taxes or penalties due to an absence of a proper will. An attorney can help you to create a trust that protects your beneficiaries from certain types of tax liability. This plan will also help you avoid probate, protect you from creditors and lawsuits and ensure your property is distributed according to your wishes. If you're divorced, it will also ensure that your children from the previous marriage receive their share.
2. To Prepare for Incapacity
If you become disabled, a trust will ensure that your affairs are managed in a way that reflects your intentions while protecting you against financial exploitation. The trustee will also have full discretion to pay reasonable and necessary expenses for your care and medical treatment. The best thing is that they can do this while maintaining control over the assets.
In addition, if you had an existing living will or health care power of attorney naming someone else as agent under those documents, they can be called to serve as trustee if authorized by the law and after careful deliberation with doctors and family members. Such power will allow the individual to make competent decisions on your behalf if you're incapacitated.
3. To Protect Beneficiaries
Your beneficiaries may not know that they are your heirs until it is too late. If you want your assets and property to go to the intended recipients after your death, you should create an estate plan. An experienced attorney can protect your family members from inheritance scams and ensure everything goes where it belongs upon death. An estate plan will also ensure that any debts owed are repaid rather than falling on the survivors' shoulders.
Estate planning is a wise choice for you if you want your assets to be taken care of. It ensures your wishes are carried out and that the right people receive what you want them to have after you pass away. This planning will also help you avoid probate court.
For more information on estate planning, contact a professional near you.