Time is an important thing when it comes to estate planning. Even if you’re a natural procrastinator, put your dithering aside and get to work. You can live freely knowing your loved ones will be safe and comfortable if the unexpected happens if you have a solid estate plan in place.
In this article, we’ll look at ten important advantages of estate planning. Our goal is to help you understand the benefits of estate planning and why you should take care of your plan as soon as possible.
Some basic estate planning documents, such as a last will, a healthcare proxy, a power of attorney, and a living will, are required to secure your estate. A will is required to specify how your assets should be distributed after you die, as well as to name an executor to ensure proper proceedings. A health-care proxy is required to appoint someone to make healthcare decisions on your behalf if you become incapacitated. A power of attorney, on the other hand, is required to handle your financial affairs if you are unable to do so. A living will be required to specify your preferences for the type of treatment you want to receive in the event of a medical emergency.
What Is the Distinction Between a Will and Estate Planning?
Before we get into all of the perks, let’s make sure you know what these plans are. Some people are perplexed when it comes to wills and estate planning.
Some people think that estate planning is only for the wealthy people of the world. That is completely false—everyone has an estate.
Everything you own is included in your estate, including the following:
- Bank accounts
- Real estate
- Life insurance
You still have an estate whether you own a lot or a little. Trusts, wills, and other documents are included in an estate plan. These documents outline your final wishes after you die.
Now, let’s look at the advantages of having an estate plan:
1. Take Care of Your Family
The most important advantage of estate planning is that it allows you to provide for your family even if you are no longer alive. You work hard every day to provide a comfortable life for your family, and with proper planning, they will be able to maintain the standard of living they enjoy now.
Don’t abandon your loved ones. Your family can focus on caring for each other in the aftermath of an unexpected death without the stress of figuring out how to provide for themselves; they will not fall apart due to sudden financial strain.
2. Plan for Your Children
It’s a frightening thought, but consider this: what would happen to your children if you and your partner were tragically killed in an accident tomorrow?
Estate planning allows you to maintain complete control over the situation even after you pass away. Allow the courts to make decisions about your children’s lives. You can appoint a guardian, specify your financial wishes for your children, and leave instructions through estate planning.
3. Quickly distribute property
When an estate goes through probate, loved ones are frequently forced to wait many months before receiving any payment at all. This can be a very stressful situation, especially if the family is dealing with paying for a funeral and settling debts.
Proper estate planning expedites property distribution to the deceased’s loved ones. Your family can avoid inconvenient delays and alleviate financial stress.
4. Reduce Estate Expenses
If you fail to plan your estate, attorney’s fees and court costs can reduce the size of your estate. When you die without an estate plan, the courts must handle everything: guardianship of your children, asset distribution, debt payment, and even the dissolution of your business.
Probate can be very costly (and time-consuming). Rather than spending thousands of dollars on legal fees, handle the planning yourself and leave more assets to your loved ones.
5. Make Decisions Simple
What if you had to decide whether to end the life of a family member who was in a coma? What about the decision of where to bury a loved one? Or do they want to be cremated?
These decisions can be heart-breaking and painful in a time of crisis. However, by including your wishes in your estate plan, you can make life easier for your family members. Specify your preferences for end-of-life care and how you want your ashes to be handled. Nobody is more qualified to make the decision than you, and your family will appreciate your thoughtfulness.
6. Facilitate Retirement
Most people believe that estate planning will make life easier for their loved ones in the future, but did you know that it can also improve your retirement experience?
You are more likely to take advantage of government programmes available to you during your retirement if you organise your financial life. You’ll also have more peace of mind knowing you’ve planned for the future and taken care of your loved ones.
7. Reduce Tax Liabilities
Death and taxes are said to be the only certainties in life, but estate planning can help you reduce your tax liabilities. Each dollar you pay in taxes is a dollar your family will not receive after you die. There are numerous tax-saving strategies available, and the sooner you begin, the more you will be able to leave to your loved ones.
8. Make a Disability Plan
You probably associate estate planning with death, but it can also help your family deal with incapacity. What happens to your finances if you have a stroke or an accident? Who will manage your property and pay your bills? You can preserve your wealth and maintain control even while you’re out of commission by delegating the management of your healthcare decisions and financial concerns to someone you trust.
9. Attend to Business
What will happen to your business after you pass away? A business succession plan can complement your estate plan by guiding your heirs through the process of handing over your business to qualified successors.
You can provide for your family and employees by creating a plan for “business as usual” even if you become incapacitated or die. Our business experts can assist you in developing such a plan, giving you, your family, and your employees peace of mind.
10. Donate to Charity
Finally, if you want to leave a lasting legacy in the world, consider donating a portion of your estate to a charity or cause close to your heart. We can assist you in incorporating philanthropy into your estate planning. While you may not have the financial resources of Jeff Bezos or Warren Buffett, even a few hundred dollars can help your favourite charity.
11. Reduce Your Expenses
Do you know where the majority of people’s money goes when they don’t have a good estate plan? Legal fees and court costs
When you die without an estate plan (particularly a living trust), the courts are forced to handle everything: property distribution, guardianship of your children, and business dissolution. This is referred to as “probate,” and it can be very costly — easily exceeding $10,000 for even modest estates. That’s money your family and children could have used for living expenses and other bills, but instead it’s just lining your attorney’s pockets.
You have the opportunity to ensure a smooth transition to someone else and the continuation of the business by specifying what happens if you become disabled or die. Don’t do your family a disservice by leaving loose ends untied