The benefits of estate planning go beyond that of only making a will. Through thorough estate planning, people will be able to take care of themselves and their loved ones with their actions. There are many additional things estate planning offers that many people never consider.
Despite how everything estate planning offers, nearly half of all Americans do not have an estate plan. One of the reasons for this may be because they do not know everything they can do with estate planning or estate planning is only for the wealthy. Everyone can benefit from proper planning and enjoy these benefits:
Sparing loved ones from probate
Probate is the legal process of dispersing a decedent’s estate based on their last will and testament. If a decedent does not have a will, then the probate goes to a court to decide who will receive what assets. If a court gets involved, then the probate process can go from weeks to months, to a matter of years. Probate costs time, money, and effort to settle, and you can spare your loved ones from these costs by planning.
No one expects to become so sick or injured that they can no longer speak or act on their behalf. When tragedy should strike, you can spare your loved ones a considerable amount of worry by making severe decisions ahead of time. Estate planning allows you to appoint a trustee, specify medical wishes like life support or vegetative state preferences, determine guardians for dependents, and state how you want others to care for your property. This planning can leave all the guesswork out of caring for you when you need it most, and spare loved ones from fighting about what you would want for yourself.
When a loved one passes their estate or assets on to a beneficiary, it can cost them a severe amount in taxes if you do not handle them properly. Putting funds in a trust instead of a will allows someone to pass along their assets while avoiding some estate taxes, the assets can also disperse before anyone passes on. There are many types of wealth transfer taxes that may apply to your estate like income taxes, gift taxes, generation-skipping taxes, and estate taxes.
Estate planning is not just about passing on your belongings; it is about securing your future and ensuring your beneficiaries get what you want to give them when you want to give it to them.