One of the most difficult but necessary aspects of financial planning is estate planning. It is difficult because very few people want to contemplate leaving their loved ones behind. However, it is one of the most essential steps in a fully comprehensive financial plan.
Once believed to be something only wealthy people needed, estate planning is actually equally important for middle- and low-income families as well, especially those with children still living at home.
You can use estate planning to help protect loved ones that have special needs as well as those who aren't as judicious with their spending by making special provisions for how their inheritances are distributed. Estate planning can help you accomplish so much more with your assets than you can imagine when properly managed.
Why is Estate Planning so Important?
Estate planning helps to protect your assets for your family. These are just a few great reasons why estate planning is critical for everyone and not only those who are financially set.
- Allows you to designate distribution of your assets rather than leaving them to chance or lawyers to determine after you're no longer here to have a voice in the matter.
- Protects your children financially should something happen to you. More importantly, you are able to identify who will care for young children and set aside financial trusts for them.
- Reduces tax penalties. Proper estate planning can greatly reduce tax penalties that could cost your family.
- Protects your privacy. When you do not have an estate plan the courts may become involved in the distribution of your assets, especially in terms of debt settlements. When this occurs, your private holdings, assets, debts, and other information become matters of public record.
- Allows you to establish a person to speak for you if you become incapacitated and provides you with a voice about what kinds of life-saving efforts you wish to have made on your behalf.
The key thing to know about estate planning is that every person is unique. You have unique needs, concerns, goals and financial circumstances. That is why it is important to work with a financial planner that will help you create a customized estate plan that is tailored to meet your specific needs.
Click here if you would like to have a financial advisor contact you about your estate planning needs.