As much as you should plan for your personal finances or do succession planning for a company, you also need to understand that deciding who will inherit your assets is also important. This is called estate planning. Estate planning is not just for well-off people, it’s for everyone. It may not be as fun as planning your next trip, but you will prevent devastating consequences for your heirs. Here are some reasons why estate planning is important.
1. Choose Inheritors
Estate planning is for those who have families and assets left behind. By doing some estate planning, you can decide which assets go to whom. This includes your home, stock investments, corporate and government bonds, and other possessions.
This will not only help you by ensuring who will inherit which items, but it will also benefit the people you leave behind. In the absence of an estate plan, the people you leave behind often fall into a disagreement on who gets your assets. There are a lot of stories of families being stuck in court and designating who inherits the assets. To avoid all this mess and drama, string up your estate plan before it is too late. Mile High Estate Planning can help you set up your estate plan if you are unsure how to do it.
2. Protects Your Children
You will never know when you will die, so it is best to be prepared, most especially if you have young kids. If you are a parent, then you must make sure that your young kids are taken care of and have a home. If you die too soon, make sure that you have finances and guardians in place before they turn 18. Without an estate plan, your kids might fall into the system; and we all know how cruel it is if your child gets stuck in the system.
3. Spare the Heirs from Big Taxes
Estate planning will also shield your heirs from something called inheritance tax. If you plan for your estate, you can transfer your assets in a way to alleviate as much tax as possible. You can reduce inheritance tax if you plan for your estate. If you are not yet sure how to do this, you might need to consult an estate lawyer so they can show you the ropes and guide you through the process.
4. Protect Assets from Creditors
Another advantage of doing estate planning is the ability to protect your assets in any case that a lawsuit or litigation comes up. Creditors will try to get control over your assets when you pass, having an estate plan will give you another layer of protection. If your assets were to be transferred to someone else when you die, creditors can’t come after it anymore because it won’t be under your name. It will be under the name of your inheritors.
5. Get Life Insurance
Life insurance is also part of your estate planning. Usually, the benefits of life insurance include the income for your loved ones after you leave this world. Especially if you are the breadwinner, life insurance will come in handy for your loved ones.
If your assets do not have much value, then the life insurance can cover for the expenses of your family until they can get back up on their feet. On the other hand, some kinds of life insurance will also allow you to plan for your wake and burial. If this is included in the package, you can organize your own wake and burial already. So that, when you die, your family will not be bothered by these things anymore. You can save by comparing online for the best life insurance deals that fit your personal situation.
6. Give You Some Peace of Mind
Estate planning is a lot of work, but once it is done, a huge burden in your heart will be lifted knowing full well that your assets will go to your loved ones. For the future of your family, you need to do estate planning. Rather than leaving decisions up to the court, you can make the necessary preparations to ensure all your hard work and hard-earned money will go to the people you want it to go to.
Now that you know the importance of estate planning, make the necessary steps to settle your affairs before leaving the earth. Estate planning is something that you need to do as soon as possible. With an estate plan, you will leave your loved ones with less headaches and added security. Therefore, it’s best to make a graceful exit by doing estate planning.