Live Well; Leave Well: Plan Your Estate for Those You Love

When you purchase a house, you put a lot of thought, research, and consideration into it because it’s a major life decision. Do you put the same amount of effort into planning what happens to the house and other assets when you’re gone? While it’s less exciting to think about, choosing who will get everything that you’ve worked hard for is important for your family. You can make these decisions in an estate plan.

The Importance of Estate Planning
Without an estate plan, your loved ones could face unintended and potentially devastating complications when you pass away. With a collection of certain legal documents, though, you can dictate the distribution of your assets. You can also dictate how your family handles financial and health-related decisions on your behalf if you’re unable to make those decisions yourself.

Contrary to popular belief, you don’t have to have high net worth to need an estate plan. Anyone can benefit from one. By executing a plan, you ensure that your loved ones are cared for and have less to worry about upon your passing. Let’s take a look at how.

1. It protects your beneficiaries and young children.
   The main component of an estate plan is designating which assets go to which beneficiaries. Your assets can include your home, vehicles, bank accounts, stock portfolio and more. If you don’t have an estate plan when you pass away, the court will decide where your assets go, which can take years and become expensive. There’s no guarantee that your spouse, if you’re married, will automatically get everything either. Having a legal plan in place eliminates this issue.
   
   If you have children younger than 18, it’s important to plan for the unthinkable in order to protect them. An estate plan will include who you want to be their guardians. Without it, the court will decide who raises your children.

2. It prevents family conflicts.
   There are plenty of horror stories about family members fighting after someone wealthy dies. Even if you don’t think that there could be a problem, the chance to control assets and finances can bring out the worst in the best people. Making the arrangements for them takes the possibility of squabbles out of the equation and ensures that your assets are handled according to your wishes. You can even get specific with the details, such as setting up a trust for a child or distributing varied amounts of money to certain heirs.

3. It reduces estate and inheritance taxes.
   Part of protecting your loved ones after your death involves reducing the tax burden from the transfer of your assets. Unfortunately, both federal and state governments impose fees on beneficiaries for receiving estate assets and inheritances. They may be subject to income tax as a result too. Estate planning can reduce how much taxes that your beneficiaries will owe.

Starting the Estate-Planning Process
You can start the process of planning what happens to your assets by seeking assistance from a professional. An estate attorney can help you take an inventory of all your assets, create and execute an estate plan, and keep your plan up to date.