Estate Planning Explained
When you die, those assets you left behind will need new owners. The cars, houses, your businesses, etc., will need to be put into someone else’s care. With a will, which is an important component of an estate plan, you can designate beneficiaries for each of the assets you own. This means that, if you want your eldest son to inherit your business, an estate plan can help you do that. Or if you want one of your houses to be given to charity, you can put that desire in your will and it would be granted.
Without much ado, let us take a look at what estate planning is.
Estate planning has a lot of definition. You see, if you understand the concept behind estate planning, you would be able to create a definition yourself. Estate planning in simple terms is a plan done to ensure that one’s assets is well managed and distributed after death. An estate plan can also ensure that you are well taken care of should you become incapacitated.
- It protect young inheritors
The age difference between parents and children is often significant. Thus, there is a huge possibility that they may leave this world before their children. So, the best way to ensure that their children, especially minors, are well catered for after their death is to create a perfect estate plan.
As a parent, you know what is best for your children. You can designate a guardian for them in case you kick the bucket before they become adults. If you die without a will, the court would designate a guardian for your children who will cater to them as they deem fit.
- Help prevent probate
A lot of beneficiaries and estate executors dislike the probate process, and this is because it can be time-consuming, stressful, and very expensive. The probate process could take weeks, moths, or even years.
Probate is usually done to validate your will, estimate the value of your estate, settle any unpaid taxes and bills and share your remaining assets to the designated beneficiaries.
Probate is more terrible than it sounds. And the best way to ensure that your beneficiaries don’t go through the difficulties that comes with probate is by planning your estate. A trust, specifically, can help you prevent this process.
- It saves time and money
When you die without a will, it means you have died intestate. What his means is that, your assets will be managed and distributed based on the intestate laws of the state you reside in. the probate court will designate representatives to share your assets.
In a lot of cases, the surviving spouse is usually charged with sharing the assets of the deceased. However, if you don’t have a surviving spouse and no close family member is willing to take the job, the court will designate a public trustee to share your assets according to state law.
While all of this is on, no one can lay hands on your assets or execute your directives. They are all frozen until the court system scrutinizes every detail of your estate, applies state laws, settle unpaid debts, and makes decisions about how to allocate your assets.
The probate process, on the other hand, involves a lot of paperwork and court appearances by lawyers, and the estate pays their fees. Probate can be time-consuming, it can take months or even years before it is concluded. Given the legal bills, it can end up being very expensive for surviving family members.
- It helps prevent family scuffle
When you plan your estate, your wish will be known via the content of your will. However, if you fail to plan your estate, your family members will scramble to lay their hands on your assets using any means necessary. This could result in a full blown war in your family. Your brother could file a lawsuit against your wife in a bid to claim your house. Your wife could take your sister to court for one reasons or the other regarding your assets. Things could get messy quickly if you don’t have an estate plan.
However, if you have an estate plan, the tendency of an ensuing scuffle is low as your wishes will be outline in your will.