Simply put, estate planning is a way of making a plan for what will happen to your assets when you die. The term “estate planning” covers a wide variety of strategies people may use to make sure that their wishes are followed after their passing. For example, a facet of estate planning that most people are familiar with is writing a will. Other common types of estate planning include creating a living trust and designating beneficiaries of your bank, investment, and retirement accounts.
Estate planning is an important thing for everyone to understand and consider. Here are a few reasons why estate planning makes sense, no matter your health, age, or how much money or assets you believe you will leave behind:
1. Estate Planning Will Help Your Family During a Difficult Time
It is no surprise that your death may cause incredible stress for your family and friends. This stress may be compounded if there are questions about your last wishes, or if your family is tasked with the burdensome and time-consuming process of probating a will. Estate planning may help reduce the time and energy your family has to spend unwinding your affairs so they can focus on healing and supporting each other.
2. Estate Planning Can Save Money
The federal government imposes income tax on estates over a certain value. Many states also excise income taxes on estates. Like much of the tax code, the rules and regulations regarding estate taxes can be complicated. If you take the time to investigate your options, however, you may be able to qualify for certain exemptions that will save your heirs a great deal of money in taxes and preserve the value of your estate. Additionally, there are ways to avoid having to put a will through the probate process, which may save your family from having court costs taken from the estate, may keep the value and assets of your estate private (probate records are public), and may speed the timeline between your death and disbursement of assets.
3. Estate Planning Can Make Sure Your Final Wishes are Carried Out
It goes without saying, but your family (and the probate court) cannot distribute your assets the way you want them distributed unless you give them a road map. It may be as simple as writing a will that complies with your state’s requirements for a valid will. For more complicated estates, you may want to consider creating a living trust or adding co-owners to your property or business ventures.
4. Estate Planning Can Help You Determine Who Will Care For Your Children
In a similar vein to number 3, if you have minor children you should absolutely have a plan for their care after your death. You can use estate planning to specify who you wish to be appointed your child’s guardian, and you may even set up a trust for their future care. This can save your family difficult decision-making and reduce the amount of strain on your children during a tumultuous time.
These are just a few of the reasons that estate planning is an important, if difficult, subject to consider. Taking time now to consider what will happen after you die is an amazing gift that you can give to your loved ones. Do some research on estate planning in your state and consider reaching out to an experienced and qualified wills lawyer Scottsdale AZ trusts who can get you started in the right direction.
Thanks to our friends and contributors from Arizona Estate Planning Attorneys for their insight into divorce.