Have you started your estate planning yet? Although estate planning is typically something thought to be reserved for older people, it’s actually something you can do at any time. You can start planning long before you reach retirement age and continue making adjustments over time.
There are many different components involved in estate planning, including asset distribution, probate administration, wills, power of attorney designations, living trusts, business succession, and more. It’s understandable if the complexity of these components has been keeping you from moving forward, but you can make it easy by hiring an attorney.
If you haven’t considered estate planning yet, regardless of your age, here are some of the best reasons to start planning how your estate will be distributed and managed after you pass.
1. You’ll have peace of mind
Estate planning will give you peace of mind knowing your loved ones will be taken care of after you pass away. Imagine what would happen if you passed away and you didn’t have a plan for how you wanted your possessions to be divided amongst your loved ones.
Without an estate plan, which includes a will, there will likely be confusion and even arguments over who is supposed to get what, and how you want your last wishes to be carried out. It’s not exactly an easy process, and just having a will isn’t enough to make sure your loved ones get the items you want them to get.
In your estate plan, you can name an executor who will take over the administrative process and make sure things happen smoothly. They will manage all the technical requirements and communications, and make decisions in alignment with your wishes.
While you definitely need to have a will, its existence won’t make things happen according to your will without first being processed through the court. Someone (your executor) will need to physically take your will to the court to be processed. They’ll also be in charge of making sure your assets aren’t prematurely distributed.
For example, if you will your grand piano worth $30,000 to your grandson, that grandson can’t just take the piano after you die. Once the court starts the probate process to make sure all of your debts are paid, it’s possible that the court might require selling the piano to cover your debts. Your will only comes into play after probate has been completed and your debts are settled.
Having an estate plan will give you peace of mind knowing your executor will handle the details and make the process as smooth as possible.
2. You have minor children
If you have minor children, no matter how old you are, you need an estate plan to name a guardian for your kids, should you pass away at any age. If you don’t name a guardian for your kids in your estate plan, they’ll likely have to go through an extremely stressful experience with the state until a relative can get custody.
Even so, the relative who gets custody might not be someone you want to take care of your kids. Worse, the court might decide none of your relatives are fit to raise your kids and they could go into foster care.
A change in custody of children can become the center of some difficult family battles. By creating your estate plan and naming your child’s guardian, you get to choose who takes care of your kids.
3. Taxes can be traumatic
State and federal inheritance taxes are enormous and the only way to reduce them is to have an estate plan that transfers your assets in a way that creates the smallest possible tax liability. Sometimes you can bypass all inheritance taxes, but even if it’s only reduced, it will help.
Unfortunately, beneficiaries often inherit things they can’t afford to pay the taxes on and have to sell the item to pay it off. This is especially true for houses and other real estate properties.
Start your estate planning today
Now is the best time to start creating your estate plan with the help of an attorney. The estate planning process is easy to understand, but it’s not simple enough to do on your own, so make sure you hire legal counsel to help.
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