Estate Planning is Essential for Securing Heirs and Managing Financial Affairs – Reasons Why People Require an Estate Plan
As you chance upon the word “estate”, it might make you think of vast stock portfolios, mansions, antiques, art, and other costly possessions such as fine jewelry, cars, and yachts. It usually comprises of the things which the high-net-worth people and other elderly people leave after they die.
However, the process of estate planning is not meant only for the ones who are very old or the ones who are very wealthy. Each person, regardless of their age or financial status, can opt-in for estate planning and benefit from it, considering there are assets you can leave to certain people. To know more about it, you can check out K&Y Law P.C. in Ontario.
Here are a few reasons as to why estate planning is essential:
Estate planning moves beyond the will
Most people think that an estate plan and a will are same. That is not true. However, the estate plans and will offer instructions on how the assets and goods can be managed after your death. However, the estate planning includes much more. It can comprise the following:
- Durable powers of the law for appointing individuals to make financial or medical decisions on your part if you can’t offer instructions.
- Beneficiary designations for explaining who must get the cash from annuities, life insurance policies, retirement accounts as well as other financial accounts.
- The medical directives for outlining the medical treatment you want provided you are incapacitated.
- One or more trusts for facilitating the passing of properties to the heirs and offer tax advantages for you and the beneficiaries.
Estate planning can save money and time
When a person dies without any will, it indicates that they have died “intestate”. Here the state laws where you stay and your property decide all that takes place to the assets and those who will give it away. The potential court will denote a representative for distributing the assets. In several cases, the spouse is the one who gets the job. And if a person doesn’t have a surviving spouse and there is no close family member who can get the job done, the court will decide on the public trustee for distributing the assets based on the state law.
Estate planning helps to avert huge taxes
One of the reasons because of which estate planning gets linked with the rich people is the estate taxes. The federal estate taxes usually affect the ones who are wealthier. The reason for this is that the tax exemption is about $11.7 million per individual. The inheritance and state estate taxes might be another aspect.
Estate planning secures children
If there is no estate plan, the potential court will have a legal guardian for the kids, such as a grandparent or a family member. Additionally, a third party, like a family friend, can also petition the court to get appointed as a guardian. And if a minor kid doesn’t have any existing family member, it’s the third party who can step forward.
These are a few essential reasons for which there is need for estate planning. It’s always better to get in touch with a legal firm to get estate planning services.
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