When people talk about estate planning, it can sometimes conjure up images and ideas of sprawling mansions, yachts, overflowing wealth and extensive assets. The truth of the matter, however, is that estate planning simply refers to planning how to distribute your assets after your death.
Estate planning is not only for the wealthy; it is a smart procedure for every individual to explore. If you are considering how you wish to distribute your assets such as property, businesses and other assets after your death, estate planning is an essential step.
Something that a lot of people are not very informed about as they approach retirement age and beyond is the very real risks involved with assets going through probate after their death. Probate is a process whereby the state or an executor must prove a person's will and ensure there are no legal challenges to it, pay debts and taxes of the estate and then distribute what is left to beneficiaries. Probate can take a long time, and the estate could become significantly diminished through meeting the financial obligations involved in the process.
Estate planning can help your heirs avoid this process. You can set up a trust and fund it with your property, for example, to ensure that the assets transfer to your heirs. There are other options as well that can help you minimize costs for your beneficiaries, such as tax-free gifts before you die.
When to start estate planning
If you have reached an age where you have begun to think about your legacy, now is the time to begin estate planning. If you put off this important task and never get around to doing it, it could leave your loved ones in difficult circumstances after your death. Although it is unpleasant to think about death and dying, proper estate planning is a practical and essential step to take. When you make your wishes known in advance, it can bring peace of mind to you and your family.
Consulting with an attorney who specializes in estate planning is a good first step to take. A consultation can provide you with important information about your specific options and how you can proceed. It is best to start the process sooner rather than later.