Did you know that 60% of Americans do not have a will or estate plan? This number is surprisingly large taking into account that everyone should have one. If you don’t have an estate plan, maybe it’s time to get started. In this blog, we’ll go over 5 advantages of estate planning and how it’s essential for protecting your family and assets.
Before we start going over the advantages of estate planning, let’s make sure you understand what it is. It often gets confused with a will, but they’re not the same thing. Simply put, a will is only one document that’s included in your estate plan. An estate plan is a broader plan of action for your assets—which could apply during your life or after your passing. Many people mistakenly believe that estate planning is just for the rich; however, that couldn’t be further from the truth. It’s for everyone. Your estate includes everything you own, such as your:
- Real estate
- Bank accounts
- Life insurance & more
Regardless of the amount you own, you have an estate. Estate plans usually involve documents such as trusts, a will, etc. These documents basically outline your wishes after you pass away.
- Provide for Your Family
One of the main advantages of having an estate plan is that it helps provide for your family. If you don’t have an estate plan, your family ends up with less, and it takes them longer to get it. This leaves your loved ones in limbo as they might not have enough money to pay for their living expenses. It’s not uncommon to see families struggle financially for months or even years after a loved one has unexpectedly passed away. With an estate plan, you can make sure that your family is protected and not left in financial ruin without an income.
- Avoid Probate
If you don’t have a living trust or will when you pass away, the probate court and state law will control how assets are distributed to your family. This process takes a lot of time and money. Additionally, if your estate goes to probate, it becomes public record. In contrast, a trust will ensure your family’s privacy and asset protection. Estate planning gives you the authority over what you want to happen in the future, so take advantage of that.
- Protect Young Children
No one ever thinks about dying young, but one has to be prepared for anything. If you have young children, it’s best to have a safeguard for this situation. In this portion of estate planning, you can make the decision of how you want your children to be taken care of. If both parents die before the age of 18, you can name the guardians that will look after them. Without this will, the court will step in and decide who will raise your kids.
- Reduce Your Estate Taxes
Another major advantage of having an estate plan is the ability to reduce or possibly eliminate estate taxes. There are many ways this can be achieved, but one of the most common ways is with an irrevocable trust. This can be used to avoid ensuring that everything is transferred to your beneficiaries or a charity of your choice. This type of trust ensures that your estate does not go to probate. This reduces the risk of losing ownership or someone else acting as the trustee.
- Make Sure Your Business Runs Smoothly
If you own a business, big or small, it’s essential that you get an estate plan. Without one, your business would quickly fall apart or maybe even close down completely. This would cause tremendous financial hardship to your family. Fortunately, with an estate plan, you can make sure there is an orderly transition. This will outline what will happen in the case that you get disabled or pass away.
Estate Planning with Elite Wealth Management
It seems like many people devote more time to buying a car, planning a vacation, or even selecting a spot to eat dinner than they do to estate planning. It may not be as fun to think about compared to booking your next trip, but without estate planning, you can’t decide who gets everything that you’ve worked so hard for. We hope this blog helps you see the major advantages of estate planning. If you’re ready to start working on your estate plan, Elite Wealth Management is more than happy to help. Contact us today to schedule a consultation.