Six non-tax reasons you need an estate plan
Developing an estate plan might not be the most fun activity in the world, but it is important. Here are six reasons why.
Failing to plan your estate can have expensive and long-lasting repercussions on your assets and your family.
Many people already know about the tax benefits of creating an estate plan. But there are several non-tax reasons you might want to think about before you put off creating an estate plan. Here are six.
1) You’ll protect your beneficiaries
If you die and leave no will behind (a will is a crucial part of an estate plan), the court will decide who gets your assets. This can take a long time and cost people money in the process.
It might also result in an unfair or indecent division of your assets among those you care about. If you plan your estate and produce a will, you will be able to determine who gets what.
You know your family better than the court system does. Maybe you’ve got an odd collection of action figures your little brother would love, but your kids would think nothing of throwing away. Or maybe there’s someone in your family who wouldn’t cope well with large lump sums of cash, but would love to take on and care for the house.
Whatever your family dynamic is, planning your estate will allow you to be sure that everyone gets what they need (or deserves).
2) You’ll avoid or drastically simplify probate
Probate is a process whereby a deceased person’s will is validated, the worth of their assets is calculated, and their final bills and taxes are paid before the excess is divided among their beneficiaries.
This will usually take somewhere between six and 12 months, but complications can slow down the process considerably. Not only that, but probate will likely cost your estate a lot of money.
Avoiding probate involves detailed planning. Things like joint ownership of property, beneficiary designations, pay-on-death or transfer-on-death accounts, creating a living trust, or giving away property can all help avoid probate.
For example, in the State of Georgia, probate cannot be avoided with just a will alone. An expert estate planning attorney in Johns Creek cites failing to fund your trust as one of the most common estate planning mistakes. Without doing this, probate will likely need to be gone through.
3) You’ll determine where your children will live
If you have children under the age of eighteen, and something happens to their parents, you want to be able to have a say in where they grow up. If you don’t name guardians in your will, the court will decide who is going to raise your children.
This can be an extremely difficult decision, with several factors you need to consider. This being said, the repercussions of not making this choice will be affecting your child or children for years to come.
4) You’ll minimize the emotional strain on your family
Everyone has heard stories of family disputes being created or rekindled by the death of someone and the division of their assets. Most people believe the same thing will not happen in their own family, but they are forgetting the weight of grief and how it can affect people’s behavior.
After the death of a loved one, many people are not themselves, they may end up fighting with one another over their estate, just to get the emotions out.
Planning your estate can protect the relationships of your grieving family members, plus take the strain of decision making off of them during that difficult time.
5) You’ll provide for your own needs
Not many people think about this one, but it is important. In the event you become unable to make decisions for yourself, an estate plan can make your wishes clear. Medical and financial decisions can be made in advance with proper estate planning.
6) You can support your philanthropic goals
Maybe you want your beautiful cottage property to become part of the neighboring conservation area. Perhaps you want to make sure your favorite kid’s sports team can carry on without financial struggles. Or you could want to donate a family heirloom to a museum.
Whatever your philanthropic goals, you can be sure that they are much more likely to see the light of day if you plan for them.
Is it time to plan your estate?
As you can see, there is a lot more value in an estate plan than just avoiding taxes. Planning for your estate can protect you, your loved ones, the causes you believe in, and your assets from misuse or negligence. It can also give you peace of mind here and now.