It seems like most people devote more time and resources planning what car to buy, vacations, or where to eat dinner compared to estate planning. A well-crafted estate plan indicates who should inherit your specific assets after you are gone. Sure, it may not be as fun as cruising in the Allure of the Seas. But failure to create an estate plan means you cannot choose who gets any of the assets that you worked so hard to own.
Estate planning is not only for rich people. Unless you have an unacceptable estate plan in place, settling your affairs after you’re gone could have a lasting and costly impact on your heirs and relatives. Are you still not convinced that an estate plan is important? Here are the reasons you should pay special attention to this issue.
Protect your heirs
Estate plan was once considered a task for high net worth people. However, things have changed. Today, many middle-class families are supposed to plan for when something bad happens to the family’s breadwinner. After all, you no longer need to be super-rich to perform well in the real estate or stock market. These are some of the assets you may want to pass on to your children or beneficiaries.
Even if you own a second home only, it is important to decide who should inherit the property when you die. This gives you control over what happens to your asset when you pass away.
Note that the primary component of an estate plan is the designated heir for your assets, whether it is a stock portfolio or summer home. In the absence of a will or an estate plan, courts will decide who will inherit your assets. This process takes a long time, rack up legal fees, and could get ugly if your loved ones cannot agree on some issues.
The courts don’t know which child has been responsible and who should have free access to your money. And the courts may not even rule that your surviving spouse gets everything.
Protect your young kids
Nobody wants to die young. But if you are the parent of young kids, it’s best to plan for the unthinkable. That means you must think critically about the will section of your estate plan. To make sure that your kids are well-taken care of, you must name a trusted guardian, in case you and your spouse die before the kids turn 18 years.
In the absence of a will, the courts will step in, and this time not to decide who inherits an expensive piece of artwork. They will determine who gets to raise your kids.
Eliminate family-related conflicts
You have probably heard those horror stories. A person with a lot of money dies, and a war between his loved ones starts. One of the kids thinks that they deserve more than others, and another sibling feels that he or she is supposed to be in charge of the money even when they’re notorious for racking up heavy debt. These squabbles do get ugly and, in most cases, end up in court, with your loved ones pitted against one another.
Stopping these conflicts long before they begin is another reason an estate plan is essential.
Seek legal counsel
The process of creating an estate plan is complicated. It’s best to consult a trusted lawyer who can help you create an accurate and legally acceptable estate plan. Also, the attorney can help your beneficiaries or heirs to ensure the smooth implementation of your will and the entire estate plan.