Estate Planning: Why It is Important

Estate planning is about ensuring that your assets will be distributed according to your will and minimizing the burden on your loved ones after your death.

One of the most important aspects of estate planning is ensuring that your documents are valid and up-to-date, including your will and power of attorney or protection mandate. If you die without a will, your assets will be distributed according to the rules on intestacy in your state of residence, which may not necessarily be what you had in mind. The courts may, for example, decide to exclude your named beneficiaries or the charities you have chosen and include unnamed beneficiaries.

That’s why it’s important to develop an estate plan. You can hire an estate planning attorney to help you go about the process. They will use their experience to help you plan and divide your estate or assets.

Essential Legal Documents

The first step in creating your estate plan is to gather the relevant legal documents:

●       The will is the basis of all estate planning. It designates the person in charge of administering your estate and your existing trusts and dictates how your assets will be distributed upon your death.

●       A power of attorney (protection mandate) is recommended. You need a power of attorney to administer your finances and a personal directive for your health care if you are no longer able to make your own decisions.

What Is Included in the Estate Plan?

The estate plan actually corresponds to everything that a testator can inherit or everything that passes to the heirs upon death. Upon death, both assets, i.e., objects, real estate, or claims against third parties, and liabilities, such as debts, are transferred at the time of death. If the debts are greater than the values, then the estate is over indebted. In such a case, it is better to refuse the inheritance. The net estate is also calculated by deducting the inheritance and inheritance debts.

The Importance of Having an Estate Plan

A well-designed estate plan aims to:

●       put your affairs to reduce the burden on your family;

●       guarantee that your assets will go to the heirs of your choice;

●       facilitate the efficient administration of your estate;

●       minimize income tax payable after your death and free up the funds needed to pay it;

●       provide for the management of the property of beneficiaries who are not able to do so;

●       appoint a trustee to administer the minors' funds or property;

●       give guidelines on the guardianship of minor children.

Get Off on the Right Foot

1. Be organized. Gather the information you will need and think about how you would like your estate to be distributed.
2. Discuss with the people you consider entrusting the role of liquidator, trustee, or tutor. Contact a lawyer (or a notary) to begin drafting the legal documents.

Estate planning is not necessarily an easy subject to discuss, and although the process can be complex, you will gain a lot in terms of peace of mind when you are sure that your estate will be settled according to your wishes. By doing so, you reduce the suffering of those close to you after your demise. It is advisable to start your own estate planning as early as possible to ensure that your ideas are actually implemented.

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