Find Out Why You Need an Estate Plan
Most people assume estate planning is a luxury strictly reserved for the rich. The truth is everyone requires an estate plan, regardless of age, occupation or level of wealth. Here’s why.
A Plan for Your Wealth
Whether you have millions of dollars and several properties or rent an apartment, you need an estate plan. As long as you have assets of some sort, a plan is necessary to distribute everything you have worked so hard to earn. Otherwise, there is no guarantee your significant other, children and other relatives will receive exactly what you have designated as theirs. So don’t assume it is only the wealthy who are looking to protect their wealth through minimizing federal estate tax exposure with estate planning. Estate planning benefits families of all wealth levels, ensuring they can maintain a high quality of life years or even decades into the future.
Those who have a simple savings account and those with a wide array of investments require a will. Your will is the foundation of your estate plan. The will explains which family members, friends and other parties receive specific assets, when those assets are to be distributed and how they are to be distributed. The will explains the distribution of all types of assets ranging from investment securities to automobiles, jewelry, antiques, homes, family heirlooms and so on.
Those who pass away without a will die intestate, meaning the state assumes control over the distribution of assets. State law might dictate assets go to a party you no longer favor. Therefore, even those who have minimal assets need a rock-solid estate plan with a carefully crafted will.
Everyone Needs an Executor of Their Estate
It does not matter if you are wealthy, middle class, a senior citizen or a young adult: you must name an executor of your estate. The executor is tasked with carrying out your desires in accordance with the details of your will. The individual named executor can be a family member, friend or a professional. Furthermore, truly comprehensive estate plans go as far as naming a successor who can take over as executor in the event the first choice cannot perform the duties.
Estate Planning is Necessary to Ensure Your Children’s Well-being
If you have kids of any age, it is imperative you meet with an estate planning attorney as soon as possible. Your estate planning advisor will help you create a will that explains who is to care for your children upon your passing. Otherwise, it will be up to the court to determine who is appointed as your kids’ personal guardian. Though the court is supposed to look after the children’s interests, there is no guarantee your kids will end up with the appropriate party. It is better to clear up any potential confusion by naming guardians now with a will crafted by an experienced estate planning attorney.
A will also provides you with the opportunity to establish a guardian for your kids’ finances. If you pass away, someone will have to protect your kids’ financial well-being so take your time when selecting the property guardian. This individual will be tasked with managing your child’s property that is not managed in another manner (property in a custodianship or a trust). Furthermore, your will can also serve the purpose of establishing long-term management of your child’s property. Your attorney will help you craft an idiosyncratic will that designates an adult to manage property until your offspring reach a specific age. Otherwise, your kids will automatically receive their inheritance when they reach the legal age of adulthood (18 years of age).
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