The term ‘estate’ would bring images of the rich and high net worth individuals. Therefore a general assumption would be that only the high-end part of society would get into estate planning. In reality, estate planning can be done by all individuals irrespective of economic background. An estate includes all assets like investments, real estate, insurance claims, and other personal possessions.
Estate planning is your decision on how you would like all the assets you have left behind after your demise to be distributed. It could be to individuals or organizations of one’s choice. In the absence of such a plan, the state will take hold of the assets and carry out its distribution that may not indicate how you would like your assets or estate to be treated.
Getting hold of the legal opinion from Estate Planning Attorney in Monroe, NC, can help execute your ultimate wish on how your estate will be allocated. Here is why estate planning is essential:
Different to a will:
While both estate planning and writing of a will sound similar on the surface, estate planning is a much broader term. Will executes the decision after death while estate planning decides while alive and after death. Decisions like transferring power of attorney to make decisions if medically unfit to do so, beneficiaries to insurance claims, provision of tax deductions and associated benefits, etc., all are encompassed in estate planning.
Avoiding inheritance tax burden:
With estate planning, the inheriting individual or heir to the estate mentioned will be made to less or even no tax to the IRS. This can help minimize all the possible arising state estate tax and inheritance tax that your heir may have to pay. No wonder why all the rich folks do it!
Protects your offspring:
In the likelihood of your demise, the question of “Who will take care of your children?” will arise. Estate planning ensures that your children are looked after since a guardian will be mentioned in the plan. It is highly advisable to name another guardian as an alternative if something were to happen to the initial guardian.
Avoiding potential disputes:
In many cases, after the family member’s death, other members start debating and arguing as to who gets what and how much, leading to disputes in the family. Estate planning helps get rid of such a situation as a detailed inheritance is made beforehand itself.
Such a plan is beneficial not only when dead but also during life. The durable power of attorney and healthcare proxy help execute decisions when you get incapable or get incapacitated.