3 Reasons Why Estate Planning Is Important For Every Family

Estate planning enables people to plan how their assets such as their homes, bank accounts, investments, life insurance and others will be distributed among family members when they pass away. If these are not planned and finalized beforehand, the matter is taken up by probate courts using state laws with outcomes which may not be in accordance with the interest of the family. People associate and reserve estate planning with wealthy families that have numerous properties and possessions, but it is not just for the wealthy and rich. This article will highlight three reasons why estate planning is important and beneficial for every family.

Estate Planning is More Than Making a Will

In addition to providing instructions for the distribution of assets after a person is gone, estate planning includes other provisions such as durable power of attorney to make medical decisions on the person’s behalf; in the event that he or she becomes incapacitated, designating beneficieries of what financial account goes to who and creating a trust to make a way of passing property to their heirs with tax benefits among many others.

Minimizes Involvement of External Parties

When a person passes intestate, state laws of where their properties belong preside over the matter of what happens to them. If survived by a spouse, the probation count appoints the spouse to distribute the assets. In the absence of a spouse, the court appoints a public trustee to disburse the assets according to state laws. Throughout the process, the property remains frozen until the court settles all aspects and details of the matter , and the cost of the entire probate process is covered by the estate left behind. All of this can be avoided by prior appointment of an executor for an estate, and giving correct and  living beneficiaries to all investment and other financial accounts. This can be done easily with the help of an estate administrator in Honolulu Hawaii.

Provides Solution For Heavy Taxes

While federal estate taxes with an enormous threshold set at 11.7 million US dollars may not impact the majority of families in America, state estate and inheritance taxes have a much lower limit. Estate taxes are calculated based on the value of the property left behind and paid by the property itself. Inheritance taxes are calculated and charged on the deceased heirs and other beneficiaries. WIth recent revisions of state laws concerning estate and inheritance taxes, and varying taxable amounts among states, there is an increasing chance that the value of property left behind after a person dies comes under taxable amount. Estate planning provides a solution of passing property without hefty tax cuts by setting up trusts, making irrevocable gifts and opening joint accounts.

Conclusion

The points mentioned above are some of many reasons why estate planning is so important for any family. It is an effective way to avoid undesirable outcomes of asset distribution among beneficiaries and minimizing involvement of third parties when a person passes. If you’re looking for an estate litigation attorney in Hawaii to provide services for estate planning for your family, Cashman Law is a trusted legal agency with tons of experience in the field. If you're interested to learn more about their expertise and legal services, visit their website.

Author’s Bio - Author is an online blogger. The content is about estate litigation attorney in Hawaii.