Somewhere along the line, someone’s probably told you that it’s important to get a will. But, really, why is it important to get a will? After all, you’ll be gone by the time it’s ever used and, by default, your assets will go to your family members anyway. So why spend time and money pondering the inevitable? The truth is that proper estate planning extends far beyond just having a will and making sure you have an estate plan in place can lead to enormous benefits, both for yourself and your posterity. But just what are these benefits? Control, avoiding probate, protection, and, if you’re a business owner, ensuring the continuity of your business.
Benefits of Estate Planning
Control. A well-tailored estate plan allows you to retain control of your life’s work by ensuring that your loved ones are taken care of in accordance with your wishes, fairly, and responsibly. When thinking of “control”, the first example that comes to mind is a will that leaves different assets to different loved ones. While this is certainly an important part of estate planning, it is just one tool that can be used to accomplish your goals. Utilizing a combination of charitable giving, trusts, and educational planning are also incredibly effective tools in planning for your loved ones’ futures according to their individual needs and under terms you can control. Controlling your assets in this way eases the burden on your family by retaining these decisions for yourself.in deciding who is responsible for maintaining your assets and ensure all of the logistics are taken care of.
Avoiding Probate. Probate, in and of itself, isn’t necessarily a bad thing. Probate is the legal process through which an estate is settled to ensure that an individual’s assets are disbursed according to his or her wishes upon death. A goal should always be to streamline or eliminate altogether the probate process, however, because it costs money and ties up your assets while the final disposition of your estate is ironed out. If for no other reason, avoiding/streamlining the probate process is a worthy reason to start your estate planning early on in your life. Doing simple things such as naming your spouse as a “payable-on-death” beneficiary to your bank accounts is a simple and effective way to accomplish the goal of avoiding probate.
Protecting Your Children. No parent wants to think about leaving their children behind. Protecting your children (or other family members such as nieces and nephews) and ensuring that their inheritance is protected is probably the single most important reason to engage in estate planning. In a will, one can name preferences for guardians for their children in the event you pass away with minor children. By setting up a family trust, one is also able to control when and how children can access any assets you left behind for them and ensure that your child’s inheritance is protected from potential creditors.
Ensure Business Success. Business succession planning is an integral part of estate planning. Ensuring your business’ continued success after you step away from managing it, whether you intend to sell your business or pass it on to the next generation, is one of the most rewarding things you can do and exemplifies the culmination of your life’s work. This is accomplished by having a plan in place for your retirement or unexpected passing. Whatever your plans for your business are, it is crucial that a plan is in place to secure the longevity of your business or reap the harvest of your hard work.
When Should You Start?
There is never a “right” time to start planning for the unexpected. You will want to make sure you feel comfortable and are in the right place to begin your estate planning journey. Speaking with an attorney who has you and your loved one’s best interests in mind, and who understands your goals, is a great place to start.