When you hear the words “estate planning,” you probably imagine expensive estates owned by celebrities or wealthy families. You probably don’t think that estate planning even applies to you – it’s for rich people who have multimillion-dollar homes and luxury cars. What can estate planning do for you? Why should you bother?
Estate planning is not only for rich families. It’s for anyone who has assets they might wish to leave behind to loved ones. You don’t need to have a glamorous house to create an estate plan because estate planning is less about what you have and more about helping those you love.
Here are a few ways that estate planning can help you:
- Protects your young children. If you currently have young children or are planning to have children in the future, an estate plan will be beneficial if anything was to happen to you or your spouse. An estate plan lets you name who will care for your children after an untimely death, or even set up a trust in their name that they can access at a certain age.
- Protects your heirs and beneficiaries. Estate planning allows you to decide who will receive your assets after your death. You can leave your house to your eldest son and your expensive jewelry to your daughter. You can name a sibling as the next owner of your small business. Estate planning ensures that the people you love most will get the assets you want them to have without interference from the courts.
- Avoids probate and taxes. Without an estate plan, your assets can get stuck in probate, meaning they will not transfer to your heirs directly. The courts may choose to give your assets away to someone else in your family whom you did not want to receive it. A similar issue may arise with taxes as transferring large assets can rack up significant inheritance taxes if you don’t have an estate plan in place to help reduce the risk.
- Avoids family contention. If you don’t have an estate plan that clearly outlines the proper heirs and beneficiaries, an unexpected family member may claim you left your house to them instead of to your brother. This kind of fighting can lead your family to court for a long time to decide who the rightful heir truly is.
Regardless of your age, financial status, or marital status, estate planning is for you. With estate planning, you can outline your wishes and rest assured that they will be respected. Estate planning is the ideal way to protect your loved ones in the future after you pass.