Estate planning is a structured approach to anticipating and planning for your future and the future of your loved ones while you are healthy. A comprehensive estate plan ensures minor children have named guardians, you and your loved ones are financially cared for throughout your lifetime and beyond, and you have legal and medical assistance if you need it.
How Estate Planning Protects Your Legacy
While drafting a will is an important part of an estate planning process, it is not the only document you need,
Your will typically serves the following purposes:
- Identifying the document as your last will and testament that supersedes any other version
- Naming an executor to carry out your final wishes
- Designating guardians for minor children and pets
- Distributing property and assets to beneficiaries
- Explaining how debts and taxes are paid
- Providing provisions for trusts
- Outlining funeral and burial arrangements
Your estate plan may include a trust in addition to your will. Many people think trusts are just for the wealthy, but trusts can serve a wide range of purposes.
Trusts can serve the following purposes:
- Avoiding probate: assets in your trust are managed by your trustee and do not need to go through the probate process.
- Asset protection: some types of trusts are structured to provide protection from potential creditors and lawsuits.
- Tax planning: some types of trusts can reduce gift and estate taxes.
- Flexibility in asset distribution: trust makers can add conditions that must be met before assets are distributed to beneficiaries. For example, a beneficiary may receive a distribution after they get married or graduate from college. Trust distributions can be scheduled to protect a spendthrift from using all of their inheritance at once.
- Planning for incapacity: trust makers can include provisions for their care in the trust documents in case they become incapacitated.
- Caring for individuals with special needs: specialized trusts are designed to provide for individuals with special needs without overriding their government benefits.
- Business succession: trusts can be used to plan for business succession.
- Leave a legacy: you can use a trust to make single or ongoing contributions to your favorite charities or organizations.
Estate plans also include healthcare power of attorney and financial power of attorney documents to stipulate who you would like to make decisions for you if you are unable to make them for yourself. Using an advance directive or living will, you can outline which potentially life-saving medical procedures you would like if you are incapacitated.
Why Is Estate Planning Important?
Estate planning offers numerous benefits and opportunities to protect minor children, leave a legacy, and express your wishes for how your assets will be used. By working with your Katzner Law Group, you can ensure your estate planning documents are complete, follow state laws, and meet your personal and financial goals.
The Financial Benefits of Estate Planning
In addition to caring for your loved ones, estate planning has financial benefits. An irrevocable trust can protect your assets from future creditors and lawsuits, preserving your estate for your chosen beneficiaries. It can also reduce estate and gift taxes as you transfer your assets to the next generation.
In addition to protecting your financial assets, an estate plan can provide peace of mind that more vulnerable members of your family will be cared for, even when you are no longer around.
With all these potential estate planning benefits, why would anyone delay in completing these essential documents? Talking about mortality and planning for a time when you will no longer be around to care for your loved ones is difficult. However, the best possible way to care for your loved ones is to take this burden from them and create a comprehensive estate plan that fully describes how you want your assets distributed and used.
If you do not have an estate plan, your assets will be distributed according to state law. Without a will, your estate will go through the probate process, which is public and potentially lengthy and expensive. When your loved ones are not sure how you intended to distribute your assets, the risk of legal conflicts increases.
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Frequently Asked Questions
Why is estate planning important?
Estate planning enables people to control the distribution of their assets, determine who will care for minor children and pets, and potentially reduce income, estate, and gift taxes.
What are the two most important benefits of estate planning?
The two most important benefits of estate planning are the ability to take care of your loved ones when you are no longer here and to make plans for your own care should you become incapacitated.
Is estate planning only for the wealthy?
Estate planning is designed to help people take control over how their assets are distributed. Anyone with financial assets, no matter how large their estate, can benefit from estate planning.
Why do many people not have an estate plan?
Many people do not have an estate plan because they think it is too expensive to create one, they do not want to consider their mortality, or they think their estate is too small to warrant one.
Your Katzner Law Group estate planning attorney can help you consider all your options and develop a plan that meets your needs. We have extensive experience in estate planning.
You can schedule a call with us or reach out to us directly at 855.631.3457 to learn more about how best to plan today to protect those most important to you.
