Despite a seemingly fancy title, estate planning isn’t just for the wealthy. In all actuality, the term ‘estate” might not even mean what you think it does. At the end of the day, deciding who’ll inherit your belongings is a massive decision and a critical part of the actual planning. Intelligent estate planning will assist with protecting families that have young children while also keeping your heirs from needing to pay too much on inheritance taxes. The fact of the matter is that without it, you don’t get to choose who gets what. Let’s take a closer look.
Protect Your Beneficiaries
One way to ease your mind about passing on might be to make sure your beneficiaries are protected. Life insurance is one way to do this, and the insurance premium you’ll have to pay doesn’t need to be too expensive, which makes this an ideal solution. When the inevitable happens, the insurance will provide your beneficiaries with funds to cover your final expenses and to give them a bit of a cushion – especially if you happened to be the primary earner.
Naturally, nobody wants to consider the possibility of dying at an early age, especially people who have young children. But it happens. If you pass away early in your life, what happens to your kids? You have to secure your child’s future. This means you need to be prepared for anything.
To do this, you need to have a will, which is an element of estate planning. In the will, you’ll designate who’ll take care of any children under the age of 18 and what they’ll inherit when they reach legal adulthood. Without this document, the courts decide these critical matters.
Whether you know it or not, the state you live in already has a default will for those who don’t have one themselves. This is referred to as an intestacy statute. The thing is, this will rarely distribute your assets in a way that you’d desire. Having a valid will ensures this never happens.
Not only is it possible to name a guardian for your children, but you also need to think about naming a guardian for your estate. This is called a conservator. This person is responsible for managing any assets that you’ve designated for your children to inherit. They’ll ensure that your wishes are followed and can even allow your designated beneficiary to bypass the process of probate, which can be rather pricey.
Avoid Family Drama
Surely, you’ve heard of (or seen on TV) families fighting over who gets what after someone dies. It happens quite often, actually, and surely you don’t want this for your family members if something happens to you. As part of your estate planning, you choose a person to be in charge of things once you die, or even if you become incapacitated mentally before you pass away. You’ll also choose who you want to get your belongings to — and when. This can help keep family members from fighting over your assets and even going to court over them.
Estate planning is vital for your family’s future. If you choose to leave anything for your loved ones, you’ll need to have quite a comprehensive plan for it. It should specify who gets what so that it isn’t left up to the courts. Without a plan of this nature, your family might be facing the burden of going to court, paying copious amounts of taxes for their inheritance, and might not even have any say over what happens to any minor children.