An estate plan is the result of a legal process known as estate planning. This document is essential to ensure that even when you’re long gone, your wishes are carried out exactly as you intended them to. This pertains to the properties you’re leaving behind and their administration and transfers to the rightful heirs. Your estate plan can include anything of value like land, car, jewelry, family heirlooms, bank accounts, insurance policies, and other investments.
Why Is Estate Plan Important?
It’s wrong to think that estate planning is reserved only for the rich. As long as you have assets to distribute and you have heirs, an estate plan drafted by Blake Harris and other trusted firms is a must-have. After all, it all boils down to protecting what you’ve worked hard for.
The following are the reasons why an estate plan is important:
1 It Saves Time And Money
If you don’t have an estate plan, it’s the court and the state that’ll take over the directives of your assets. This means you’ve died intestate, which means not having a will. In this case, if you have a surviving spouse, it’s your partner who’d be given the responsibility to conform to the law’s requirements on the intestate disposal of assets. If you don’t have a surviving spouse or any other trusted family member who can do the job, your assets will be distributed according to state law.
The downside to this is before your assets get settled by the state, all of your possessions are frozen. So, significant time may pass by before any of your heirs will be able to enjoy your assets. More so, intestate processes can be costly. The probate process requires a lot of documentary work, which requires fees. This means rather than your family enjoying what you’ve worked hard for, your heirs or beneficiaries are burdened with payments.
An estate plan is your best bet to avoid these expenses. Be sure to name an executor of your estate plan specifically. Also, call the recipients of each asset you have to the rightful heirs or beneficiaries.
2 It Prevents Your Assets From Going To Unintended Beneficiaries
There are certain family situations when you don’t want certain assets to go to particular beneficiaries. For example, although you’re still legally married, you know your surviving spouse has an affair with someone else. You wouldn’t want to leave valuable assets to your partner then, depending on how problematic the situation. Upon your spouse’s demise, your kids may be stripped off of those assets.
These may seem like extreme situations, but they do happen. And in this case, without an estate plan, some of your assets may end up going to unintended people. You have to protect your assets with an estate plan. That way, you can specifically name who gets to receive what; since this is your directive, it can’t be questioned by the court.
3 It Protects Your Families
This third reason applies of great importance to those of you who may be breadwinners. You have to protect your family by protecting their lifestyle or what they’ve gotten used to. The need for an estate plan is also a key part of your retirement planning.
For instance, your spouse has never held a job in exchange for rearing your three children. When the breadwinner passes on, and you still have young children, your spouse is now left at a loss on adjusting and managing the kids on their own while getting a job.
Having an estate plan, in effect, protects your family. You may have certain assets and investments that can protect your family’s future. Think stocks, bonds, and mutual funds, for instance, and acquisitions in real estate rentals and commercial property.
When your spouse and family are specifically named the recipients, they no longer have to go through the long process of having these assets transferred to their names. It ensures a steady flow of income coming in despite your absence.
As you can see, it doesn’t hurt to start settling your affairs early. Estate planning isn’t only for those whom you think have a lot of property to distribute. Throughout your life, you’ll be able to amass assets that you need to distribute to the rightful recipients.
An estate plan is your voice, even when you’re no longer present to speak for yourself. Be sure you have it done with a trusted lawyer or firm, so you’re guaranteed your estate plan is in good hands.