An estate plan outlines what you want to happen to your assets when you pass away. Your loved ones will likely appreciate knowing your wishes since you won’t be there to relay them in person, but the estate planning benefits go far beyond that peace of mind.
When you don’t have an estate plan and pass away, state intestate laws come into the picture. This is an ordered list of who will be able to get the assets you leave behind. You don’t have any say in who gets what and you don’t have a way to try to protect them.
Setting your estate plan up puts you in charge of what happens. You can plan for the expenses that your estate will have, such as taxes and probate fees. There is a chance that you will be able to pay down the value of the estate while you are alive so that your loved ones won’t have to pay as much, if anything, in estate taxes. There are limits to what you can give, so be sure to find these out before you embark on a specific plan.
Your estate plan can include trusts, which allow you to pass assets to heirs without having to go through the court process that’s public record. If you choose to place assets in irrevocable trusts, those assets are also protected from creditor claims, which can benefit your loved ones. Not all trusts are created equally so be sure to evaluate the purpose of the trust to determine which meets your needs.
Working with someone who’s familiar with estate planning and the impacts of various decisions can make estate planning easier.