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6 Reasons Everyone Needs an Estate Plan

Oct 19, 2022

Many people believe that only the wealthy need estate plans. Sadly, these people can leave their heirs in trouble when they pass away without an estate plan. Without an estate plan, your loved ones will not know your wishes upon your demise and will often have to guess.

Discover six reasons why everyone needs an estate plan.

1. Avoid Confusion and Conflicts

Passing without an estate plan can cause chaos for your family and might damage relationships. Your heirs might argue over asset distribution. These family conflicts will lead to a waste of time and money.

Make an estate plan to protect your loved one from these conflicts. State how you want your assets to be distributed and managed upon your demise. Also, choose someone you trust to be in charge if you become mentally incapacitated.

2. Avoid Probate

Probate is the legal process of reviewing a deceased person's assets and determining heirs. The probate process determines whether the deceased individual has a will and if the will is valid. If the deceased does not have a will, the probate court will appoint an administrator to oversee the estate.

The administrator will act as an executor, receive all legal claims against the estate, and pay off outstanding debts. The probate process can be expensive and time-consuming.

You need an estate plan to avoid probate and help your loved one avoid exorbitant probate costs. Hire a licensed attorney to help you with estate planning. Rely on this attorney's legal expertise to create a valid will.

3. Minimize Estate Taxes

Estate plans offer practical options to reduce state inheritance taxes. For instance, your inheritors will pay an income tax on the money they get in a traditional IRA. You can avoid this tax by leaving them money in a Roth IRA.

Consult an attorney to learn advanced estate planning techniques married couples and individuals can employ. These techniques will help to legally reduce inheritance tax or avoid it completely.

4. Protect Beneficiaries

An estate plan will protect your beneficiaries upon your demise. It will allow you to appoint a guardian and trustee for your minor dependents. This person will oversee the minor's finances and needs until the minor becomes a legal adult.

Naming a guardian will also ensure your relatives do not fight over who gets custody of your minor kids after your death.

The estate plan will protect adult dependents from outside influences, divorcing spouses, and creditor problems. Take precautions to ensure your adult beneficiaries do not make bad decisions with their inheritance.

5. Protect Assets

A key part of estate planning involves asset protection planning. The plan is to protect your assets during your lifetime and your dependents after your death. You will create barriers around your assets to keep them safe from creditor claims, hefty taxes, and litigation.

Consult a lawyer to learn how to set up a trust for asset protection. The attorney will educate you on how trusts work and their roles in estate planning.

6. Make a Plan for Pet Care

If you have pets, you need to decide who gets custody when you die. You may also need to set up a pet trust to provide funds to cater to the pet's needs.

No one knows when they will die, so get an estate plan as soon as possible. Do you need an estate plan? Contact us today, and our experienced attorneys will help you create one. We will be happy to go over any questions or concerns you have about any aspect of estate planning. That way, you can have peace of mind for the future.

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