What is Estate Planning and Why it is for Everyone

Tuesday, June 14th, 2011

Whether your estate is large or small, comprised solely of personal assets or combined with a business, and whether you are further along in life or newly started out, you need an estate plan. In all cases estate planning is a necessary step that all individuals or families should embark on.

Death is unavoidable. Should it happen unexpectedly, rest assured that your estate and your loved ones will be provided for according to your wishes and decisions. Estate planning ensures that your assets and belonging go to the people that you want, in the increment you want and when you want it to.

One common misnomer about estate planning and making preparations for death is that it isn’t something to think about until the elder years. However, it is in fact necessary to act early on estate planning to guard your loved ones against the possibility of an early death. Large amounts of money can be taken out of inheritances due to unnecessary administrative fees, avoidable high taxes or it not being clear which heir should receive which portion of the estate. If squabbling among heirs was to occur, high court and lawyers fees would also be thrown into the mix.

Thus, there are three main reasons that estate planning is necessary for everyone. First, it allows you to save yourself and your loved ones as much money as possible. Taxes, court costs and attorney’s fees can easily add up when a person’s assets have not been pre-designated. Estate taxes can run upwards of 40%.

Another important and often overlooked aspect of estate planning is if you ever become physically unable to care for yourself or make decisions for yourself before passing, estate planning will ensure who, how and what will happen in regard to you health.

The other extremely important reason to handle planning your estate is to establish who would be responsible for any minor children that are under your care. If it has not been pre-established, a judge will determine who will be given guardianship of your children. Knowing where your children would go and who would care for them in the event of your death allows any parent to better sleep at night.

Now that you know why you should establish an estate plan the final thing to consider is who to work with in creating your personal plan. The largest advice is do not do it alone. It is extremely important to work with a credible attorney to design your personal estate plane. This is due to the important nature of the decisions being made as well as government rules, regulations, and taxes. It is necessary to have a trained lawyer navigate these complicated waters and to insure that everything will be taken care of accurately and to the law in the event of your passing. All of this allows your loved ones to grieve and handle losing you without being burdened with financial confusion and red tape. Really it is the final gift you have to pass on.

And don’t forget to take out and review your personal estate plan every few years. Your financial and family situation may be very much the same but laws continuously change and it is important to keep your planning up to date.

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment

You must be logged in to post a comment.