Have concerns about whether you should start estate planning? Understand that it’s never too soon to take these important steps.
Estate planning is a necessary step that those who have a large amount of money and property must consider before they pass. However, because it is so complex, many people prefer putting off this planning. Others are simply not yet ready to admit their morality. They may believe they are too young to go through this type of process.
That’s simply not the case. You don’t need to plan your estate immediately. However, it’s always a good idea to start thinking ahead about the process. Taking a few simple steps toward getting your affairs in order can help you avoid problematic situations if you pass suddenly or unexpectedly.
Planning Your Estate Can Help Avoid Increased Taxes
One problem you’re going to run into when planning your estate is the estate tax. This tax goes into effect on all the property that you transfer after your death. The property, in this case, refers to any item you possess that has a value. Cash, savings accounts, artwork, vehicles, buildings, real estate, and much more will suffer the estate tax.
The most frustrating aspect of this tax is that it can decrease the value of your estate and its benefits for your heirs. Planning your estate early can help you avoid paying too many of these taxes by creating a comprehensive and streamlined plan for transferring your belongings. Rather than rely on an auction or a more random dispersal, you can make sure every inheritance item goes to the right person.
Early Estate Planning Helps Create a Unified Approach
Beyond simplifying your estate transfer, early planning helps you create a simple, unified approach to your end-of-life property transfer. It lets you put your will in place before you suffer from a debilitating disease that robs you of the ability to sign documents or carefully plan how you want your estate executed.
For example, what if you suffer from a stroke or other sudden medical event before you can plan your estate? You will need somebody to do it for you. This duty may fall on a relative or friend who is close to you. In some instances, this relative may have their own ideas about how to execute your estate. Even if they mean well, they may end up going against your wishes. Then, there is really nothing you can do about it.
The early planning approach can also help prepare your family for what they will get when you pass and help them come to terms with it. This may cause some disputes among a few members. But letting everyone know what you plan on doing will eliminate the kind of bickering and in-fighting that makes estate planning after you have passed such a problematic situation.
The Basic Design of an Estate Plan
Before starting early on your estate plan, it is important to consider some basic needs. For example, you should try to designate any charity you plan on sending property or money to after you pass. It is also essential to break your property up into appropriate types and to take steps to ensure proper disbursement after you pass.
For example, you need to create a plan that designates all your recipients in clear and plain language. Then, you need to list the value of each item and calculate how much the estate tax will affect it. Finally, you should create a legally-binding will and estate plan with your lawyer to ensure your plans are solid.
So don’t hesitate to get started as soon as possible. It can help you take the right steps towards protecting your estate and ensure your heirs get what they deserve. Waiting too long may lead to watching helplessly as others plan your estate for you. Contact Incompass today to get started.