You don’t need to own a big house to have an estate! Your estate consists of everything you own when you die, including your home, personal property, bank accounts, investments, retirement plans and interest in businesses or partnerships.
A basic estate plan consists of a will, durable powers of attorney, and a healthcare directive. Here are five reasons why you need an estate plan, ASAP.
1. Financial Security
Having an estate plan in place can offer a significant amount of financial security, both during your life and after you die. Good planning can minimize or avoid your estate tax burden. Strategic planning can also shield your assets from your own creditors and those of your beneficiaries.
2. Stay In Charge
If you die or are incapacitated without an estate plan, the State is in charge, plain and simple. The State decides who receives your assets and the State appoints someone to oversee your finances and make medical decisions on your behalf. An estate plan allows you to retain control of your assets and your healthcare by deciding in advance how your assets are distributed and appointing someone to look after your finances and make healthcare decisions on your behalf.
3. Provide For Children
If you have minor children, you must have an estate plan. Without an estate plan, children with no other surviving parent will be appointed a guardian by the court. Additionally, a will allows you to restrict your children’s access to their inheritance via a trust provision. This is a great option for minor children or children who make poor financial decisions.
4. Avoid Conflict
The death or incapacity of a loved one can lead to both emotional and legal disputes. Providing your loved ones with a plan for your death or incapacity can ease tension, avoid costly legal battles, and spare your family difficult medical decisions.
5. Business Protection
Estate planning is essential for small business owners. After spending your life building your business, an estate plan can ensure that your vision continues after you are gone and smooth the transition of ownership.
BONUS TIP: Your estate plan should be reviewed and updated regularly- after any major life event or at least every 3-5 years.
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