Do you think that estate planning is only necessary for the ultra-wealthy? Do you question if you even have an estate?
While most of us do not like thinking about the worst-case scenario, having a plan can provide invaluable peace of mind for both you and your loved ones.
If you are asking yourself, what is estate planning, it is essential to know that it is probably something you need to consider for your family.
Let’s get into what you need to know.
What Is Estate Planning?
Estate planning refers to preparing for end-of-life issues including what happens after your death. Depending on your individual circumstances, estate planning may be complex, and mistakes can result in serious financial issues.
It is always recommended to consult with an estate planning attorney. Coordinating with a professional will ensure that you have your needs met—and that everything is taken care of legally.
Everyone Needs Estate Planning
No, you do not need to be retired or rich to qualify. In fact, these common misconceptions prevent most people from planning appropriately. As a result, if something happens to them, their family becomes suddenly responsible for handling the mess.
If you do not have a set plan, the state takes over what happens to you and your assets. If your name is on the title of your assets and you become disabled, a court appointee must sign for you. That means that the court—not you or your loved ones—owns control over delegating your assets.
You have worked hard for your money and assets. With estate planning, you maintain the control of who receives what and when. Furthermore, if you have young children, you determine who raises them if you cannot.
The Difference Between Wills and Trusts
A will outlines your instructions upon your death. However, any assets in your name still need to pass through your state’s probate before being delegated to your heirs. That said, this can be a lengthy and expensive process.
Revocable living trusts, on the other hand, avoid probate at death. Your assets remain in your trust, and you designate the trustee to maintain the accounts.
While setting up a trust may be more expensive and time-consuming than setting up a will, it pays for itself in the long run.
The Best Time To Plan Is Now
Of course, it is not necessarily fun to think about your own death. If you are young, it may seem morbid to think about something that may be decades away.
That said, none of us can predict the future entirely. We never know what tomorrow will bring. Estate planning avoids you or your family from being caught completely off-guard if the inevitable happens.
What is estate planning? It is a process that supports both you and your family. It is a method that allows you to safeguard your assets and protect them for future generations.