Many people will happily spend more time planning an upcoming vacation than thinking about an estate plan. It's understandable -- while a vacation is a fun project to put into effect in the foreseeable future, estate plans are for when you die, something most people don’t want to think about. However, leaving to chance financial decisions to do with the certainty of death, can be a serious mistake.
No matter how modest your net worth, having an estate plan ready can make sure that your assets go further, and go where you wish for them to go -- to provide for your family or to give to a cause.
What estate planning can do for you
You get to provide for your family: If you have young children, wills by both you and your spouse can help make sure that they are provided for financially. Wills can also determine who gets custody in the event of your passing away. If there is no will, the court will decide who your children will live with, and will ultimately have the power over decisions affecting their lives.
You get to give more: Skilled estate planning can help you save on the taxes that you pay when you leave property to your family. With less money spent on taxes, you will have more left over to give.
You can choose executors: Placing competent and trustworthy executors in charge of decisions to do with your estate after you pass away can make the administration of your estate much simpler, and help save money.
You can leave money to a cause: If you favor a charitable cause, leaving assets to it in your will may help your estate receive tax deductions.
You can direct succession at your business: If you own a small business, spelling out exactly who is to have power, and who has say over its affairs, can make sure that succession occurs smoothly.
A lot goes into a comprehensive estate plan
A number of documents go into the building of a complete estate plan. However, two are of special significance when you need to take care of the financial side to your legacy:
A last will:
A last will lets you specify exactly how your assets will be distributed.
A living trust:
A living trust helps you avoid spending on a probate. It lets you keep all information to do with your estate planning private. You can also save on estate taxes.
Estate planning will help you protect the legacy you want to leave after your death. It is an important step in the financial planning process and should not be ignored. When untimely death occurs to a person who has not taken care of the appropriate planning, the distribution of their estate may be outside the control of their immediate loved ones. Whether your estate is modest or you’ve accumulated an estate of considerable wealth, plan ahead to ensure your financial legacy is protected.