What Is The Importance of Estate Planning?

estate planning worksheet

You have many reasons why you are working so hard today and making big investments. It could be that you simply like to make the most out of your life. It could also be that you want to secure your future or life after retirement.

But securing your family’s future, especially your children and other beneficiaries is probably the biggest reason for everything that you are working so hard for at the moment. Even if you work hard, if your investment and everything else you own and expect to pass on to your children and beneficiaries are not managed correctly, things are not going to end up the way you hope for them too.

In order for you to make sure that everything falls into the right place, it would be a very good idea to do estate planning while you are still in the position to do so. Estate planning is the legal – and probably the best way to manage everything that you have worked so hard for.

With effective and reliable estate planning, you will need the help of an experienced estate planning attorney in order to make sure that your wishes are honored, no matter what. An experienced attorney be able to help you decide on what is best to do with your wealth and who should best be given what after your death.

If you would like to pass along money or “things” to a minor, an estate planning attorney will be able to help you assign a legal guardian to the minor to guarantee that the wealth is well managed. A skilled and experienced estate planning attorney will also be able to guarantee you a decreased tax for everything even after your death.

Choosing a reliable trust to distribute your wealth is also a big part of estate planning.

Your attorney will be able to help you legally appoint a trust without being questioned by your relatives and other beneficiaries when the time they decide comes. In case of incapacity, estate planning can also give you peace of mind and guarantee that your wealth is being managed well as you will be able to assign someone you fully trust to manage or be your proxy through a power of attorney.

Estate planning is a nice way to ensure that the wealth you will be leaving behind for your beneficiaries is not something which will break them apart but will rather make their lives a lot better. It will be the most effective way of securing your family’s future. It can go as far as deciding and spending for the funeral just to make sure that you get the decency you deserve even after life.

Understand the Key Elements of Estate Planning

Many people think that estate planning begins and ends with the writing of a Will. And even then only about a third of all Americans have Wills in place. Drafting a Will is a crucial first step in estate planning, but the process involves much more, such as financial, tax, medical and business planning.

With proper estate planning, you can determine how your assets will be handled before and after your death, who will make medical decisions for you and how minor children and other family members will be cared for. In addition to a Will, good estate planning involves doing some of all of the following things.

Consider a Trust

Placing your property in a living trust will help your family avoid probate, a sometimes long and costly court-supervised process for transferring assets to beneficiaries. The person who you have named as the successor trustee transfers ownership, allowing for a faster resolution and avoiding court fees.

Write a Living Will and Name a Health Care Proxy

Without a living will, your wishes as to what health care decisions are made should you be incapacitated may not be followed. You can avoid this by working with a lawyer to draft a strong healthcare proxy. A healthcare proxy designates who will be making decisions on your behalf when you are unable to make them for yourself.

Name Beneficiaries

Any bank accounts or retirement plans you have should have beneficiaries named to them. Naming beneficiaries make the account automatically payable on death to your beneficiary, again allowing your family to skip the probate process. In most states, you can also register your stocks, bonds, or brokerage accounts to transfer to your beneficiary.

Make a Durable Power of Attorney

By naming an agent, or attorney-in-fact, you will ensure that someone you trust will handle your financial matters in case you’re not available to do so. An attorney-in-fact can be named to serve for a specific amount of time or until the power is revoked. Remember, this arrangement is not set in stone. You have the power to revoke the authority of your agent at any time should circumstances change.

Protect your children and their property

It is important that you name both guardians and successor guardians for your children. This way should something happen to one guardian there is a clear plan for establishing who will care for your children. Also, you should name an individual who will manage any money and property your minor children may inherit from you. This may be the same person as your guardian or someone else.

Make final arrangements

Inform a trusted individual as to how you would like loved ones to be notified of your death and what your wishes are with regards to your funeral arrangements. Make sure that you have planned for the cost of these arrangements to avoid putting unnecessary stress on your family.

Make arrangements for your business

Depending on your particular situation, you should either have a succession plan, buyout agreement or sales arrangement for any businesses you may own. This will ensure that your business and its assets are transferred or liquefied in a manner that follows your wishes.

Why Should I Care?

To many, estate planning may seem like a process that only the rich have to deal with. You may believe that unless you have a large amount of money, property, or land, you do not have an “estate.” In fact, anyone who has anything to his or her name, whether it is a car, a house, land, bank account, or merely a few heirloom possessions, has an estate. Estate planning is designed to give you the chance to have your property and possessions passed on to the people that you wish to have them, instead of leaving the decision up to the state. Without planning, your property could be passed on to certain people or in a certain way that you do not approve of.

Don’t Let the Courts Control Your Estate

Creating a will through estate planning allows you to communicate your wishes to your family even after you are gone. Will is a legal writing document that specifies who you would like to leave your property to. These people are your beneficiaries. It also allows you to specify how you would like your property to be passed on. Perhaps you always expected that you would give your house to your daughter, who lives close by. Or maybe you intend to pass on your treasured tools and garage equipment to your nephew who is a mechanic. You may have already made promises to loved ones to pass on some of your treasured belongings once you pass away.

While you might have made promises to family members or conveyed all of your intentions to your children and spouse, without a will, your words of purpose will not carry any weight. When you pass away with no will, the court will divide your property according to state intestacy laws. This means that your property may be divided among your spouse, children, and other family members without any regard for your specific wishes because there was no written proof of what you wanted. It may just be a major misunderstanding on your part, but to the loved ones to whom you made promises, it may seem like scorn and betrayal. They may be left behind thinking that you didn’t care enough about them to take the time to write a will.

How a Probate Lawyer Can Help

Don’t let your promises and intentions to your family and your children go unfulfilled. Consider consulting an estate planning lawyer about how you can draft a valid will and protect your estate and personal wishes. An estate lawyer can assist you through the process of drafting a will, creating trusts, dealing with greedy or disagreeable relatives, taking care of outstanding debts, and more. An experienced probate lawyer can serve as your legal advisor to ensure that your intentions are communicated properly and that your property is passed on according to your wishes.

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