Everyone says they will “get around” to drafting an estate plan someday. However, many of them never follow through. Most people would rather take trips to appealing destinations or spend time with loved ones than fret over the future of their estate. However, that is a flawed way to go about it. Having a well-thought-out estate plan is essential.
When you have a solid estate plan in place, you can rest easy knowing that your loved ones will not have to endure tough times in the event of your untimely passing. To provide you with a clearer picture, we have compiled a list of the six tell-tale benefits of estate planning:
Saves Time And Money
If you do not leave a valid will before your death, your assets and belongings will be distributed according to the laws of the state where you live and/or hold property. After your death, a representative will be appointed by the probate court to handle the distribution of your assets. Usually, this responsibility is given to the surviving spouse. If you pass away without a spouse and no other close relatives are willing or able to act as your executor, the court will appoint a public trustee to distribute your assets under state law.
During this time, your assets are put on hold until the court has had a chance to review your estate, execute state law, settle any outstanding debts, and decide how to distribute the remaining assets. Lawyers must file documentation and appear in court throughout the administration of an estate, and the estate pays these costs. Unless you hire a qualified and seasoned probate estate attorney, this process can be very lengthy, often requiring months or even years, especially in densely populated or prosperous rural areas. The legal fees alone can add up to a significant sum for the family left behind.
By planning your estate, you can substantially cut down on the time and money it takes to settle your estate after your death. You should specifically consider the following:
- Making a will and designating an executor of your estate
- Verify that the beneficiaries on your investment accounts (including IRAs, 401(k)s, and other brokerages/bank accounts) are still alive and well. The inclusion of such designations eliminates the need for testamentary gifts.
Eliminates Family Disputes
We have all heard those horrifying stories. After one of the family’s affluent members dies, violence breaks out among the heirs. An entitlement complex among siblings is pretty much common after the death of their guardians or parents. Such disagreements can quickly escalate into bitter legal battles that pit family members against one another. That is where estate planning comes in handy. With proper estate planning, you can appoint a trusted someone to handle your financial matters in case of your incapacity or death, thereby keeping family disputes at a safe distance.
If you live with a large family, you have the option of making detailed blueprints as well. Let’s say your beneficiary is unable to handle a significant sum of money all at once. In that case, you can allocate the fortune to them in installments. Likewise, you may leave more to the child who cared for you in old age and less to the child whose schooling was more expensive. Such transparent distribution of your possessions will leave no room for any conflicts.
Prioritizes A Guardian For Minor Children
Appointing a legal guardian for minor children is an important part of a comprehensive estate plan. If you are a parent and have children but fail to do this, the court will appoint a guardian. This means that your child may be unable to stay with someone you know. A temporary foster care arrangement is usually set up for the minor by Child Protective Services. As a result, children will have to stay there until the identification of a permanent guardian.
You should name a guardian for your minor children in your will if you wish to have some say in the matter after your death. Additionally, it is prudent to designate a backup guardian in case something happens to your primary pick.
Serves You When You Are Alive
The benefits of estate planning extend well beyond the afterlife. Estate planning enables you to add a healthcare proxy and power of attorney in case you become temporarily or permanently incapacitated and need someone to make decisions on your behalf. With a durable power of attorney, you may select a dependable family member or friend to handle your financial and legal affairs if you are unable to do so on your own. On the other hand, a healthcare proxy allows you to delegate decision-making authority about your medical treatment to another person.
Without these instructions, commonly referred to as a “living will,” it could be difficult to decide who among your loved ones is in control and has the legal right to act. In a worst-case situation, a stranger (either a court-appointed guardian or a hospital employee) may be making decisions on your behalf.
Assists Family With Tough Decisions
It is hard to imagine a more heartbreaking scenario than having to decide to turn off life support for your comatose or crippled spouse or perhaps deciding what to do with the body after death. Nobody should ever be put in a position where they have to make decisions as agonizing as these.
If you give this matter some thought and make some arrangements, you will be able to make life easier for your loved ones after your death. You can detail your preferences for end-of-life care and final disposition within your estate plan. And you, of all others, are the most suited to make such choices.
Conclusion
Many people place less emphasis on creating an estate plan than they do on planning a vacation, buying a car, or even deciding where to go for dinner on the weekend. Not as fun as reading reviews of new restaurants or booking a tropical vacation, without an estate plan, your hard-earned assets will be given to whoever the court deems is most deserving. Do not think that state planning is just effective for the rich. After reading about these five advantages of estate planning, you will hopefully want to get started immediately.
