When you think of estate planning, you can imagine someone very rich and believe that this does not apply to you. estate planning is one of the key areas of financial planning that you must address throughout your life. To reiterate, estate planning isn't just for the rich. It's about putting in place a plan that will protect you and everyone you love, regardless of your wealth.
Everyone has a heritage, and all their assets, both physical and intellectual, form that heritage. You don't have to be rich or have a certain amount of assets to use the word “wealth”. People think estate planning is for the rich only because they usually hear about it in that context; a film shows a wealthy family gathered around a lawyer reading from a will, an actor's estate gives permission to use his image, etc. Actually, you have a property even if all you have is the clothes you're wearing.
While it's vital to create a plan for your estate if you have a lot of assets and money, it's also important to develop a plan if you don't have many. Although estate planning is very important to the rich, proper estate planning is needed for clients across the wealth spectrum. A common misconception about estate planning is that only “wealthy people need it. In reality, there are countless benefits associated with having a comprehensive estate plan no matter what your tax category.
In most situations, it's much less expensive to have an estate plan than it is to try to go through the probate process to manage and distribute your estate. Business owners can plan for this eventuality within an estate plan, stating precisely what they would like to happen if they died unexpectedly. Make changes or get help nowLog into your account to review your retirement plan beneficiary designations, or call your retirement specialist at 1-800-854-0647 for more information on how to add or update your account payee information. Without an estate plan, courts will often decide who gets your assets, a process that can take years, accrue fees and get ugly.
This is the simplest and most direct reason why the importance of estate planning transcends the high net worth segment. Nowadays, many middle-class families need to plan when something happens to the breadwinner (or breadwinner). Whether you have saved a significant amount of savings and are close to retirement or you still have a way to go, you should have an estate plan to make sure your assets are transferred according to your wishes in the event of your death. After all, you don't have to be super-rich to succeed in the stock market or real estate, as both produce assets that you'll want to pass on to your heirs.
One way to try to prevent heirs from wasting all their money too soon is to put them on what is effectively an “allocation” by having the estate release the assets of a trust through periodic installments over the years. If you die without a will, which is a vital part of an estate plan, the courts will decide who gets your assets. Although this is the easiest option for most, there is somewhat limited control over the distribution of assets, as your estate will likely have to go through the legalization process after your death. Beyond Wills %26 Beneficiaries Other common estate planning documents allow you to authorize another person to engage in specific business, financial and legal transactions on your behalf.
Work with a Professional to Learn Your Options You don't have to complete your estate planning alone. Even a little estate planning can allow couples to reduce much or even all of their state and federal estate taxes. For clients with complex properties, it is important to have a team that performs estate planning appropriately to include appropriate tax strategies. .