Estate planning is a lengthy and involved process. There are a lot of documents to be drawn and figures to be dug up, which makes it a daunting task for people. A survey found that 67% of Americans have no estate plan. But it is important to understand estate planning as an overall concept if you have any real estate holdings.
The process of creating an estate plan involves much more than simply passing property on through a will to your heirs. A good estate plan involves specific knowledge regarding taxes, which is why it’s important to consult with a professional before proceeding. South Star Wealth Management can assist you with estate planning and estate management. Keep reading to learn more about estate planning and how it works.
What is Estate Planning?
Estate planning entails planning for your property in advance and naming the people or organizations you want to receive your possessions after you pass away. Estate planning is a continuous process rather than a one-time event. As your family and financial circumstances change over time, you should review and update your plan.
It not only involves ensuring that all aspects of an estate are legally satisfying. It is also essential to make sure that the estate reflects the wishes of the deceased and that their family can move on with their lives as smoothly as possible.
What Are the Benefits of Estate Planning?
Control of Your Estate
With estate planning, you can have control over your estate and decide what happens to it after you pass away. A will can help you choose who gets what and when. You can determine who will be in charge of your estates, such as an executor or trustee. You can also choose who will oversee your affairs after you pass away.
Save Time and Hassle for Your Loved ones
By having a will, you can make sure that your loved ones don’t have to go through the hassle of legal proceedings to get their inheritances. You may also be able to pass on your assets without paying taxes, depending on how you do it. If someone passes away without a will or trust in place, then their heirs must go through complex legal proceedings to get their inheritances.
Helps to Prepare for Contingencies
With the assistance of an estate plan, you will be able to address any future health-related contingencies. You have the option of appointing someone to make all medical and health-related decisions on your behalf. You can also appoint someone to manage your estate and finances after your death for the benefit of your family members.
Save Money
Preplanning can save you money. For example, if you have a will, the probate process is much quicker and less expensive than if there is no will. You should be able to reduce the amount of taxes collected on your estate by creating an estate plan. It allows your beneficiaries to keep more of the money you set aside for them.
Ensures Business Continuity
If you own your own business, you might want to make plans to keep it running after your period. An estate plan will name your successor and outline what will happen to your business interests. This can keep your business alive, making sure it is in the safe hands of your successor.
Basic Steps to an Estate Planning
1. Determine What You Possess
Before you can decide what to do with your assets and how to protect them for the best future, you must first determine what those assets are. You must list all of your assets, from real estate holdings and vehicles to bank accounts, retirement funds, and life insurance policies.
2. Assign Ownership of Your Property
Your estate plan should clearly identify who will be responsible for managing your estate after your death and provide instructions on how they are to do so. It also needs to designate who will receive what assets upon your passing—the beneficiaries—in accordance with the terms of any specific trusts created in the document itself.
3. Create Directives
A detailed estate plan includes the necessary legal directives. This can consist of a living trust and will, financial power of attorney, and so on. Writing down your health-care directives can protect you if you become unable to make medical decisions for yourself.
4. Store Your Documents
Since your lawyer may need access to the various documents, you must keep them in a safe place. You should make sure that your will, trusts, insurance policies, bank account information, retirement documents, and other important documents are properly stored for this purpose.
5. Plan to Reassess
When your circumstances change, you should revisit your estate plan. This can include a marriage or divorce; the birth of a child; the death of a loved one; starting a new job or being laid off. Even if your circumstances remain unchanged, you should revisit your estate plan regularly.
If you have not planned your estate, you must take care of this task as soon as possible before an unplanned event occurs. Notably, the pandemic has raised awareness among Americans about the importance of having a will, living trust, or living will.
Estate planning is critical for you and your family to have a peaceful and organized separation of assets. This can ensure that your loved ones left behind do not have to go through the trouble of fighting over property and money. If you are unsure about how to go on with it, South Star Wealth Management is here to help! We can assist and guide you through all your financial management problems. Contact us today to find out more about how we can help you!