Life is uncertain, and death is inevitable. That is why is it important to have the proper protection in place for you and your loved ones. The best way to do this is by arranging your affairs and deciding what happens to your assets when you pass away. If you do not think that this process is right for you, consider these seven reasons why estate planning is important.
1. Properly Distribute Assets
Estate planning is not just for those with a large net worth or multiple assets. It is for anyone who has any valuable possessions worth leaving to loved ones. One of the most important parts of estate planning is deciding which of your loved ones will receive your assets when you pass away.
You will name a beneficiary or beneficiaries to inherit your possessions while planning the distribution of your estate. Even if you only own a house or a car, you still should name a beneficiary for these assets. Any individual that you have a relationship with, not just immediate family, can be a beneficiary. Without proper arrangements, the fate of your asset will be decided in court.
2. Control Decisions
Important decisions should be decided by the people you trust most. That is why you should declare a power of attorney while you are arranging your estate. This role should go to a trusted individual as it requires great responsibility. A power of attorney makes decisions on behalf while incapacitated. Incapacitated means that you are still alive, but a physical or mental condition is preventing you from making financial or medical decisions. This person is allowed to use your financial assets, sign documents, and decide on your medical care if you are incapacitated.
3. Appoint an Executor
There needs to be an individual that will oversee the proper distribution of your will and that you have outlined in your estate plan goes according. This person is called the executor. You can choose the executor of your estate in your estate plan. This person can be a family member, or you can hire a professional from a firm. The executor will ensure that all assets are divided and distributed to the correct beneficiary.
4. Appointing a Guardian
Estate planning is not all about protecting your assets. It is also about protecting the ones you love. If you are the parent or guardian to children or dependents under the age of 18, then you might want to consider naming a guarding in your will. Naming a guardian guarantees that your loved ones are put into the custody of someone that you approve of. Without a will, a court will have to decide on who will take care of your children.
5. Help with Healthcare Decisions
Estate planning is not all about the decisions that are made after you die. You can include a healthcare proxy in your estate planning. This document will name a spouse, family member, or friend to make medical decisions for you if become incapacitated state or are unable to communicate. The document will also give this individual permission to execute your end-of-life care. You can either give the individual permission to decide for you or have them fulfill your preference.
6. Protect Your Assets
An estate plan also guarantees that your assets will not be taken. Creditors and other outside entities can claim all or parts of your estate if you die in debt. Your assets are also at risk if someone chooses to file a lawsuit against your estate after your death. Asset protection means that trusts are set up to secure all your accounts and other financial matters. This ensures that your assets stay in the control of your loved ones.
7. Eliminate Family Disputes
One of the main reasons that people choose to formally arrange and plan for future life events is to avoid family disputes. It is not uncommon for family members to have disagreements and disputes regarding the distribution of a deceased family member’s assets. Often these disagreements turn ugly and must be settled in court. This process is expensive, and it can take years to reach a decision. Creating an estate plan can avoid any future drama that might occur between your loved ones.
An estate plan can solve or eliminate many issues that may occur when you are no longer around. Find an attorney in your city to help you. The future of your family depends on it.