Without an established estate plan, the courts get to decide who receives ownership of your things. This process can take years, cost a lot of money, and create bad relationships between loved ones. Estate planning allows you to manage your assets and decide who gets what after you pass.
Although you don’t want to think about passing and leaving your kids without a parent, it’s important to prepare for the worst. In the unfortunate event that both parents of the kids die, you’ll want to assign their guardians in your will. Without a will that names these guardians, the courts decide who gets to raise and care for your children.
Estate planning protects your loved ones, which can mean protecting them from the Internal Revenue Service (IRS). Estate planning is essential for transferring assets to heirs without creating a tax burden for them. Any amount of estate planning allows heirs to reduce a significant amount—if not all—of their federal, state, and inheritance taxes. Without a plan, heirs may have to owe the IRS a lot of money.
Estate plans help you stop fights between loved ones before they have the chance to start. Estate planning enables you to choose who controls your finances and assets. This reduces the risk of going to probate court and ensures that your assets are handled how you would like them to.
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A will is one of the main components of an estate plan. A will ensures that property is distributed according to your desires.
A revocable trust allows you to own your assets and distribute them as you see fit in the event of your death. Since it’s revocable, you can change your asset distribution at any time during your life to meet your needs and fulfill your wishes.
When drafting your estate plan, it’s important to designate a durable power of attorney (POA). This individual acts and makes decisions on your behalf if you are unable to do so. Without assigning a POA, the court decides what happens to your assets. POAs are essential because leaving these decisions up to the court may go against your desires.
Assigning beneficiaries is essential because you cannot pass every possession onto heirs. Assets such as retirement plans, savings accounts, and life insurance may not be given outside of a will, so the beneficiary must be clearly stated in the estate plan. Without naming a beneficiary, the court decides who the assets go to, which may go against your wishes.
A letter of intent is a document that’s left for a beneficiary. This document highlights the purpose of leaving a particular asset to a beneficiary after your death. Some letters of intent provide funeral details and other requests.
A healthcare power of attorney (HCPA) is an individual you designate to make critical medical decisions on your behalf if you are incapable of doing so. This individual is typically a spouse or a close family member. When choosing an HCPA, you should choose someone you trust and align your views with.
Most wills or trusts incorporate guardian designation; however, not all of them. Guardian designation in estate planning is often overlooked. If you have minor children, make sure you assign an individual or couple to support your kids. These designated guardians should share your views, be financially sound, and be genuinely willing to raise your children in the event of both parents’ passing.
Estate lawyers are highly trained legal experts that strive to help you manage your assets after you die or when you are not capable of making your own decisions. Estate attorneys help you develop wills and trusts and guide you through the probate process.
Although you’re not required to have an estate attorney, many benefits come with having an experienced estate planning provider. Estate attorneys help you:
Inkwell isn’t like other estate law firms. Our process prioritizes the needs of our clients and meets them at each stage of life. From adulthood to marriage to having kids, Inkwell guides you and updates your plan every step of the way. Reach out to us today to start on your comprehensive estate plan!