Many of us are apprehensive about estate planning. Creating a will, authorizing a power of attorney, and setting up a healthcare proxy to designate someone to speak for you when you can’t advocate for yourself can be grim topics.
Even starting your estate planning process can be difficult. But without proper planning, you risk potentially leaving your beneficiaries, the appropriate distribution of your assets, and even your healthcare decision-making in chaos.
What are the advantages of estate planning now?
The very premise of estate planning may make you tremble, but once the process is complete (and it’s typically not overwhelming), you’ll be happy to have a plan in place. The following are five advantages to creating an estate plan – for you, your family, and other beneficiaries:
(1) Provide for Your Family
You want to guarantee that your family is taken care of once you are no longer in the picture. Without a proper estate plan in place, it will be far more difficult to process your estate and take much longer for your assets to end up in your loved ones’ hands. An estate plan ensures that your family will be protected and provided for in the exact way you want when you are gone.
(2) Ensure the Appropriate Distribution of Your Assets
No matter the size of your estate, you want your assets to end up with the people and the organizations you designate. With a will and/or trust in place, you guarantee that your property, investments, and other assets will be distributed according to your wishes.
While immediate family and loved ones typically top the list of beneficiaries, you can designate charitable organizations or other entities as beneficiaries should you want to support a cause close to your heart. You also gain the chance to create a back-up plan should the worst come to pass in which you can pick your favorite cause to support.
(3) Minimize Taxes and Expenses
With the current estate tax regulations, the IRS limits how much money can be transferred tax-free and to whom. A well-designed estate plan can ensure you set up a tax-efficient wealth transfer strategy.
A common strategy is the creation of an irrevocable trust. Irrevocable trusts ensure you can transfer assets directly to your beneficiaries. In setting up an irrevocable trust, you, in effect, relinquish ownership of your assets, naming another person to act as trustee.
This guarantees that these assets will not need to go to probate, nor will they count towards the taxable portion of your estate.
(4) Plan for Your Possible Incapacity
In the event you suddenly can no longer advocate for yourself, you’ll want your affairs to be appropriately managed. You’ll want to have authorized someone you trust to oversee your finances – someone that can make sure your bills are paid and that you receive the ongoing and/or end-of-life care you desire.
Two tools – the Power of Attorney and Health Care Proxy documents – ensure that your affairs are being managed appropriately for you when you are incapacitated.
(5) Take the Pressure off Your Loved Ones Making
end-of-life decisions for others can be very difficult. Should you become incapacitated, who should choose whether to keep you on life support or pull the plug? Or, upon your death, what is to be done with your remains? Did you prefer burial or cremation? If so, where? These questions will loom large over your already grieving loved ones. Help them help you.
Make your wishes explicitly known with a Living Will and an Appointment of Agent to Control Disposition of Remains. Your loved ones will thank you for it.
Even with the benefits of estate planning laid out for you here, it is okay to have concerns about planning for your ultimate future. If you have questions about your own estate planning strategies, let’s talk. Feel free to contact us regarding any reservations you may have about getting started, or email us at firstname.lastname@example.org, or call us at 212-867-9120.
We are here to make estate planning easy for you as you plan for your family’s future.