Estate planning is not only for the rich but everyone who has a loved one. People need to plan what will happen to their assets after they are gone. It might not be a fun experience, but it helps avoid disputes.
In a survey done by Caring, 57% of Americans have no estate plan documents in place. It means many people still disregard the importance of end-of-life planning. Here are valid reasons why one should have estate planning in place.
Protect the beneficiaries
Gone are the days when estate planning was for those with high net worth. Nowadays, both the rich and the middle-class families have to plan what happens once the breadwinner is no more. They must decide who inherits what assets rather than leaving the judge to settle disputes after their death.
Many families are no longer in good terms due to estate battles. Wars between families or siblings are frequent as they cannot decide who takes care of the assets. These disputes may even end up in court and split up blood ties. An estate plan is an excellent way to stop them.
According to the Internal Revenue Service, people pay estate taxes for assets they have not transferred to beneficiaries. Estate plans hence help people avoid payment of inheritance taxes and federal taxes. Transferring assets to heirs protect them any form of Internal Revenue Service and reducing the tax burden.
A court process to decide who takes what after the property owner’s death is lengthy and costly. It can also put the assets at risk of getting on the hands of irresponsible individuals.