Top Reasons Why You Should Have A Legally Binding Estate Plan

Legally Binding Estate Plan

Arrange your future financial life with an estate plan. Safeguard your children’s future through an estate plan. With an estate plan, you can safeguard your wealth. An estate plan ensures that your wishes are obeyed when you are gone. It’s used to pass wealth to future generations. In a nutshell, everyone should have an estate plan for the following key reasons.

Smooth Asset Distribution

An estate plan stipulates how your assets should be distributed after your death. It can also incorporate other details, such as durable powers of attorney, springing powers of attorney, medical directives, as well as, beneficiary designations.

When making beneficiary designations, you’ll be required to outline who should receive funds from your financial accounts. And this will play an important role in minimizing family wrangles and ensuring that your assets are successfully transferred to the desired beneficiaries. Hire an attorney in melbourne florida to help you write the best estate plan. 

Saves Time, Money

If you die without a will, the law will decide what happens to your property. The probate court will choose a representative to distribute your investments. And in most cases, this person will be your surviving spouse or a close family member. Your assets will be distributed according to state law.

Your assets will be frozen until the probate court clarifies every part of your estate, pays off debts, and decides how to allocate your property.  Being a complex process, probate law involves a lot of paperwork, as well as, court appearances.  It’s also very expensive and time-consuming.

The only way you can avoid these complexities is to create an estate plan. Make sure that your will has the correct living beneficiaries and the name of your estate plan’s executor.

Decreases Tax Burden

Estate planning is commonly associated with the rich. But the truth is that federal estate taxes are only applicable to the ultra-wealthy. Having an estate plan will help your loved ones to avoid paying heavy taxes.

The estate will pay for inheritance taxes, as well as, other estate-related taxes. If you run a family business, a life insurance policy could be helpful. Setting up a trust, creating joint accounts, or making irrevocable gifts will ensure that your assets pass to your beneficiaries without the federal government taking a bigger portion of it. Nut for you to execute your plans more efficiently, you need to create a comprehensive estate plan.

Protects Your Family

If you don’t have a surviving spouse, who will take care of your children in case you lose your life? Without an enforceable estate plan, the court will appoint a guardian for them. A close family member or friend will be appointed to take care of your kids and this could be against your wish.

If a legal guardian isn’t found, your children might automatically enter the foster care system. If you want your children to be safe, you should identify your preferred guardian in your will.

You may also want to name an alternate guardian for enhanced security. Remember, life is unpredictable and something could happen to your first choice.

Addresses Medical, Financial Care

An estate plan typically includes two components: a healthcare proxy, as well as, a durable power of attorney. These legal documents are designed to ensure that your wishes are carried out in case you’re unable to handle them.

When it comes to a durable power of attorney, a trusted person will be appointed to manage your financial affairs in the event of death or incapacitation. On the other hand, a healthcare proxy appoints someone to handle your healthcare decisions if you can’t deal with them yourself.  

Without a living will or trust, it can be extremely difficult to decide who’ll take action. The court might even decide to appoint an unfamiliar person to make important decisions for you.

Avoids Probate

Several factors determine if your estate is liable for income taxes. And these include the gross value of your assets, your debts, deductions, as well as, the total expenses incurred when settling your estate.

Creating an estate plan will allow you to designate beneficiaries and avoid getting your assets to probate. And this will in turn play a significant role in reducing your tax burden and giving your heirs peace of mind. Working with a qualified estate attorney will ensure you understand everything about the implications of state and federal taxes. As such, you’ll be able to plan accordingly.

Updated Documents

Life is full of surprises. Wishes and circumstances keep changing from time to time. Such things could include marriage divorce or the birth of a child. Whenever such changes occur, it’s imperative to update your will or trust so that it continues to meet your expectations.

After the occurrence of a big life event, be sure to contact your estate attorney. He or she will ensure that your estate plan is updated to reflect your newest desires. Hiring an experienced attorney can be life-saving. It can help you avoid costly mistakes and streamline your estate planning process.

Don’t Have An Estate Plan? Here Is What Will Happen

Without an estate plan, your asset will be distributed according in a probate court. The judge will decide how your estate will be transferred to your family members. And this may not be in line with your wishes.

If your wishes aren’t written in an enforceable will or trust, then your heirs will have their assets controlled by the court. An estate plan allows you to organize your family affairs and keep them as private as possible.  

Estate planning is an emotional process. It involves complex family dynamics. But with the assistance of estate planning lawyers, you can rest knowing that your current and future needs will be fully met. They’ll provide you with an unbiased answer to protect your loved ones down the road.

The Bottom-Line

If you love them, protect them. Safeguard your family’s wealth. Draw a will. Use an estate plan to protect your family’s wealth when you are going. Eliminate tax burden when you are gone. Minimize chances of probate with a clear estate plan. Hire the best estate planning lawyer to guide you through the process. Use the plan to document your final wishes. 

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