The digitization of estate planning has helped smoothen the industry. This change has also contributed to many changes and trends, from digital notarization and digital assets to family limited partnerships and GRATs. All of these aim to encourage individuals to consider estate planning. But is it important? Well, up to 77% of Americans believe so, regardless of their wealth. Here are a few insights into why this estate planning is vital.
Keep Your Beneficiaries Protected
The unexpected could happen at any time. Excellent estate planning will ensure that your dependents are safe when this time comes. Usually, this planning allows you to identify who manages your assets and investment portfolio, ensuring that your beneficiaries have a steady flow of income even in your absence. It will also ensure that the assets remain in the hands of your loved ones.
Without a comprehensive estate plan, the court will decide how to distribute the wealth, assets, or investment portfolios you leave behind. Ideally, this move denies you the room to exercise your wishes and preferences.
Suppose you die intestate. In that case, your beneficiaries will be exposed to significant taxes from the IRS, local authorities, and states. The assets you leave behind will be subject to inheritance tax and other state estate taxes. Cumulatively, this could take off a considerable chunk of your property. You can avoid all these by considering estate planning.
Various transfer taxes will also suffice. You will need to pay a significant amount of taxes, particularly on transfer taxes. Three forms of transfer taxes suffice, generation-skipping, estate, and gift taxes. Fortunately, an excellent estate plan attempts to minimize these taxes.
Eliminates Family Scuffles
Families will likely fight every time a breadwinner leaves without a comprehensive will or estate plan. Every family member will want a particular piece of property or investment portfolio. You can avoid this issue by making early arrangements. Doing it early enough will guarantee your family protection against unwanted scuffles.
A comprehensive estate plan indicates who will control the assets and investments left behind. It will also state the various benefits that each beneficiary will get. This way, the transition process will attract minimal conflicts in the long run.
Minimize Time and Resource Wastage
You do not want to waste money or time on meaningless court or probate cases. And neither do you want this to happen to your beneficiaries. Preparing an excellent estate plan will help cushion your family and beneficiaries from such issues.
Ordinarily, probate courts will come in handy when you die intestate. These courts could take a significantly long time to determine who should manage your assets, including dividing them. The cost involved could also be relatively high, depending on the lawyers hired. Yet, this amount is subtracted from your cumulative assets. It is a waste.
Prepare for Future Generations
An estate plan allows you to prepare for various uncertainties that could significantly affect your family in the long run. According to the Council for Disability Awareness reports, one out of every four 20-year-olds will be disabled before they retire. If you are in this group, this is a perfect way to prepare for your future. On the other hand, suppose you are a parent. In that case, you will be cushioning your children’s future.
In addition, you want proper asset management. Choosing who can run your investment will ensure that everything is in safe hands. It will also give you the confidence that your wealth will grow even when you are gone. However, it would be best to choose an experienced wealth manager or a prudent beneficiary to achieve this.
Studies show that approximately 18% of people complete their estate planning before turning 50. Doing so in advance will cushion you from various inconveniences. You will also have the time to change your wishes whenever necessary. With the insights above, you understand why this is vital.