Many people seem to spend more time planning to eat out or a vacation than they do planning who’ll inherit their estate. Yes, estate planning may not be as enjoyable as checking hotel reviews or booking a vacation, but without it, it’s not possible to decide who receives all you’ve really worked hard for.
Estate planning isn’t for rich people only. Without estate planning, your family might be affected long-term, even if you’ve got no expensive home, valuable art piece, or huge investment account to bequeath. If you aren’t convinced that estate planning is important, here are four reasons why it’s very important to plan your estate before you pass on.
Stops unintended beneficiaries laying their hands on your estate
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Estate planning is important not just for the rich but also the middle class. After all, you needn’t be very rich to flourish in the stock market or in real estate, which both generate assets you might want to hand down to your heirs. Even if you only have a second home, if you do not decide who gets the property when you pass on, you won’t have any say on who gets the home.
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Protects families with young kids
If you’ve got young kids, you need to be ready for the unthinkable. To ensure your kids are cared for your own way, name their guardians in case you both die before the children are 18. Otherwise, the courts are going to step in and determine who’ll look after your children, not who gets part of your real estate or piece of art.
Stops inheritors overpaying in taxes
Estate planning is basically about protecting your family, which means partly protecting them from huge tax hits. Transferring assets to your inheritors with the intention of having the lightest possible tax burden is key to estate planning. Even with a little estate planning, parents can reduce all their state inheritance taxes, or state and federal estate taxes, which can be very costly. But without a plan, your heirs are going to owe the government lots of money.
Stops family squabbles after your passing
We have all heard about family squabbles that happen when somebody rich passes away. This wrangling can turn ugly and wind up in the courts, with relatives taking on each other. This is yet one more reason why it’s essential to have an estate plan. This will let you decide who controls your estate should you become mentally incapacitated or pass away. It’ll also help a lot in quelling any family conflict and making sure that your estate is handled in the manner that you want.…