Why is estate planning important for many individuals?

Estate planning is about protecting your loved ones, which means, in part, providing them with protection from the Internal Revenue Service (IRS). It is essential for estate planning to transfer assets to heirs with a view to creating as little tax burden as possible for them. Family members have been clashing in court for years and things often get ugly. By having an estate plan to designate who inherits what, you and your family members can avoid a potential mess by leaving things to chance in the court system.

Two of the most common special circumstances that can affect estate planning decisions are blended families and concerns about families with special needs. Again, each of the options listed above has both advantages and disadvantages, so it is best to have a comprehensive package of estate planning documents and thoroughly review your assets by an experienced estate planning attorney. Part of estate planning includes appointing individuals to play key roles “in case of scenarios. However, a key component of estate planning includes documentation in case you become incapacitated.

An estate plan represents all of your assets, which may include real estate, investments, cash and savings, and other physical and intangible assets. Review your plan regularly or after major life changes, such as a marriage, divorce, or death in the family. For the vast majority of people, avoiding probate is a very good reason to create an estate plan and can be easily achieved. Asset protection planning has become a major reason why many people, including those who already have an estate plan, meet with their estate planning lawyer.

According to a recent survey, COVID-19 motivated more people to see the need for an estate plan, and now younger adults are more likely to have a will than older adults. For example, if children are not old enough or mature enough to handle a large inheritance, an estate plan can address this by making provisions through a trust. Many clients seek the advice of an estate planning lawyer after personally experimenting or seeing a close friend or business partner experience significant loss of time and money due to a loved one not making an estate plan. In fact, you can add clauses to your estate plan to help protect these beneficiaries from themselves and anyone who tries to take advantage of them.

Sometimes married couples can even avoid estate taxes altogether through AB trusts, ABC trusts, or revocable living trusts. Whether you're about to retire, are retiring, have had a life-changing event, or need investment advice, Pure Financial's team of charge-only fiduciary financial advisors help you design an investment strategy and retirement plan based on the best interests of your goals financial.

Miguel Cubeta
Miguel Cubeta

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