5 Reasons Why Estate Planning Is One Of The Best Things You Can Do

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Life is uncertain. You never know what card you will be dealt with. Unfortunately, there may be situations where you may not be able to lead life the way you have wanted. It may be a morbid thought, but it’s reality. Nobody has control over the ‘how’ and ‘when,’ and this is when estate planning is one of the best things you can do.

Many people consider estate planning to be something only for the wealthy – the Jeff Bezos brigade and their ilk – or the very old – the Warren Buffett uber-rich.  Not so.  The need to handle estate planning is something we all need to consider.

It is a plan to ensure your assets – whatever and wherever they be – home, personal possessions, investments, life insurance, antiques and collectables – are dealt with in a way that gives you control over how they are disposed of.

Life is uncertain. You never know what card you will be dealt with. Unfortunately, there may be situations where you may not be able to lead life the way you have wanted. It may be a morbid thought, but it’s reality. Nobody has control over the ‘how’ and ‘when,’ and this is when estate planning is so important.

Estate planning is undertaken to be prepared for the unexpected in case it does occur. Even in everyday lives, you must plan your assets if life takes a turn and you meet an uncertain event.  It is not just crucial for you but also for your loved ones.  It can also avoid a lot of problems that can otherwise arise for those who have not prepared properly for unexpected – or expected – events, including death.

Despite its importance, people keep delaying it. They look at it as something that has to be done in the future.

We recommend you start planning about your estate as early as possible. There is never really an appropriate time. If you’re new to the estate planning business, it can get overwhelming.  

What are some of the key benefits of properly planning your estate?  Here are five –

Estate Going to Intended Beneficiaries – 

If you already have an estate, you must execute the necessary documents for it. It will ensure that your estate does not go into the hands of unintended beneficiaries.

We have seen several cases where people claim their rights over estates that haven’t been executed properly. This can be avoided through wills and revocable trusts.

Remember that estate planning involves more than just a will.   There is also key issues such as –

  • Appointment of specific beneficiaries who will receive funds from any insurances, financial accounts, retirement accounts and the like;
  • Durable power of attorney in respect of the financial or medical decisions that need to be made when you cannot do so;
  • Trusts that help deliver property into the right hands and to avoid tax issues (see below);
  • Medical instructions that provide directives in respect of any treatment you do or don’t want in the event of major medical events.

Minimize Taxes for Beneficiaries –

In most states, the law requires the beneficiary to pay a massive tax for inheriting the property. This can be done away with if there is a proper estate plan in place. The cost, however, can be reduced significantly.

 Recent tax changes under former President Trump made some substantial tax and financial planning changes, which once again makes estate planning important.  For instance,  increased exemption limits, lifetime gifts of estate assets can be made without concern of triggering federal gift and estate taxes, except in the case of those who have estates that exceed the exemption amounts.

Gifting can also be done with an eye toward shifting assets likely to experience high levels of appreciation. This can serve to  shield the value increase of those assets from future estate taxation in your estate once the current exemption limits expire after 2025.

Remember that state estate and tax issues differ and, for us as an estate attorney in Tucson can provide specific information about estate and tax issues in Arizona, just as you should see an experienced estate lawyer practicing in your own state.

Elimination of Family Disputes –

It is common to see disputes arising due to the non-determination of beneficiary names. This especially happens in families with many members eager to stake a claim on the deceased person’s assets. Thus, lawyers always advise preparing a will that specifies the name of the beneficiary, the estate that they will be inheriting, and conditions (if any). There are high chances of avoiding disagreements, feuds, or disputes over the estate, at least.

Peace of Mind –

People plan their estates to secure the lives of their loved ones. There is no greater contentment than knowing that your family can financially sustain themselves even after you have passed away. We all work to secure a good life for ourselves and our families. Estate planning ensures that the assets you have so painstakingly earned go to the people you love.

Estate planning is also vital as it offers financial freedom and as has been reportedly the need for medical, financial and planning issues during the pandemic are more important than ever. More than anything else, you can ensure that there is always a source of income irrespective of your circumstances. While we have tried to lay down a rough outline, we suggest you contact your lawyers to understand the intricate details of estate planning for you and your family’s future.

Source: Elkins & Muir

Elkins & Muir, PLLC, is an experienced law firm that can help you with wills & estates, family law, and divorce. You can learn more here.

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