If you want to be sure your property is protected and properly distributed to your loved ones at the time of your death, then you must do some family estate planning. In the absence of proper estate planning, your family may be forced to deal with serious tax consequences, as well as other issues. Another consequence of not having a family estate plan is that you will be leaving most of the decisions relating to your estate to a judge, as opposed to making those decisions yourself.
What exactly is family estate planning?
Estate planning is how you get yourself and your family ready for what happens after your death. Estate planning also allows you to plan ahead in case you unexpectedly become incapacitated. Planning for the future is important for everyone, regardless of how small your estate may be your family dynamic.
Creating a plan gives you the advantage of specifying who you want to inherit your property when you die, while helping you to reduce the taxes your estate may incur. In case you become incapacitated, whether temporarily or permanently, your estate plan should be able to provide the protection you and your family will need if you are unable to make decisions on your own.
Estate planning is not only for wealthy families
A very common misconception is that estate planning is only necessary if you have a lot of money or assets. That is not at all the case. Family estate planning protects everyone who has anything they want to leave behind for their loved ones. Even the smallest estate needs a plan in order to protect the assets as well as the beneficiaries who will receive them. One of the most important reasons to plan ahead is that most middle-class families need to know what to do if the family’s breadwinner(s) are no longer around to provide support.
Estate planning guarantees your property will be distributed properly
The primary reason most people engage in family estate planning is to be sure their property doesn’t end up with someone they don’t intend to have it. However, if you don’t make those important decisions now about who should receive your property, the court will ultimately do it for you. If the court is left to make those decisions, it can take years to complete and often leads to unhappy family members.
Estate planning provides protection for families with minor children
While no parent wants to consider the possibility of dying while their children are still minors, it can happen. That’s why you need to prepare now. A will is a very important part of every estate plan that can help you make plans for protecting your minor children.
Every parent wants the opportunity to make all of the decisions regarding their child’s care. In order to ensure that your child will be properly cared for, in the way you see fit, you need to choose a guardian to care for them, in the event both parents die before the child reaches the age of majority. If not, the court will make this decision for you.
Estate planning can reduce estate taxes
If you want to be sure that your heirs will not have to pay more than necessary in estate taxes, then you need to have an estate plan. Another major goal of estate planning is minimizing estate taxes as much as possible. A part of your estate plan should also provide a way for you to transfer your assets to your heirs with as little tax burden as possible. It doesn’t take major planning to reduce or even eliminate estate taxes if the right exemptions and deductions are selected. However, without an estate plan, your family will likely be forced to pay the government quite a bit.
Estate planning can prevent family squabbles over inheritance
Deciding how to distribute your estate equitably among your loved ones can be challenging. Unless you provide very specific instructions in your estate plan, your executor will be left to decide how everything should be divided. Avoiding family disputes or money and heirlooms can be accomplished through family estate planning. Ultimately, you don’t want your family fighting over your personal possession, after your death. An estate plan you can help you avoid most of the challenges that come with distributing an estate.