You’ve heard of “will and testament,” but what is estate planning? Estate planning involves the process of drafting wills that set out how you want your property distributed after your death. It also entails making sure that any necessary taxes are paid before they become due.
If you die without an estate plan, it can be very confusing to figure out who gets what. That’s why it pays to take care of these things now while you still have time.
Estate planning in detail
When looked at a closer level, estate planning goes far beyond just drafting a will. In fact, it’s not even necessary to draft a will. All the same benefits of estate planning can be achieved by executing a trust document. Estate planning can also entail minimising taxes that you have to pay both while you are alive and after death as well as resolving issues that may arise with your will. For instance, you can appoint an executor to take care of any outstanding debts and taxes before anything gets passed on to your heirs.
Trust documents are useful in various situations—such as making sure that the right person is looking after your children if something happens to both parents or that important pieces of the property end up where they’re supposed to be. Trusts are also relevant when special arrangements must be made for people with disabilities or other special needs.
Benefits of an estate plan
There are many benefits associated with having a will or trust document properly executed by a lawyer. If nothing else, it helps deter family disputes over who gets what part of the good ol’ pie once someone passes away. What’s more, you can nominate a financial guardian for your children and specify their upbringing, education, and even religious beliefs.
Providing such detailed instructions on how you would like things to go down when something happens to you saves everyone involved the trouble of figuring it out after the fact. It also makes sure that your last wishes are respected—something which can’t be said if there isn’t an established plan in place beforehand.
Who can help you create an estate plan?
Lawyers that have experience with estate planning can help you create a will or trust document. They can also advise as to how best to distribute your property and what steps to take should something happen to you. In fact, they’re the experts that can pinpoint legal loopholes and other problems before they become an issue, ensuring peace of mind for everyone involved. Think about what objectives of estate planning are most important to you and make a list of desired results. Once you have outlined your objectives, find a lawyer with the abilities to meet those particular needs and work out an arrangement.
Take the first step towards achieving all your estate planning goals by doing some work as soon as possible. You will feel better knowing that you have taken the steps to protect your most valuable assets.
Who needs estate planning?
Anybody who owns property or has dependents should at least consider making an estate plan, but it becomes even more important as we get older. Even if you had one before, checking up on your current estate plan once in a while is recommended to make sure it’s still relevant. This does not just apply to parents but strangers as well, who may be responsible for a person with special needs or disabilities.
It's wrong to think that only the extremely rich need to consider making an estate plan. A plan can help ensure that your property is split in its proper proportions and avoids the need for long and expensive court battles over who gets what after you pass away.
How much does it cost?
The costs of establishing an estate plan vary depending on the nature of the business, but lawyers usually charge around $500 to $1000 for basic estate planning services. The actual price depends on the lawyer’s experience, reputation, and time spent working on your case. An inexperienced or unknown lawyer will usually charge less than an experienced professional with a good reputation.
Make sure to do thorough research and compare quotes before you accept the services of any lawyer. The added peace of mind and satisfaction will make the price tag well worth it.
What if you don’t have an estate plan?
In the case of a family dispute over inheritance, the courts will appoint a trustee or administrator to look after your assets until they are divided up. The court’s ruling is final—there’s no way of getting around it—so being proactive about estate planning can save you and your loved ones from the unwelcome hassle of dealing with the legal system.
While it’s true that nothing is guaranteed in life, the surest way to avoid these nasty surprises is by creating a proper estate plan. Make sure your loved ones are taken care of after you're gone with the right will or trust document and don't risk them having to go through the trouble of sorting everything out after you die.
Estate planning is not new
This concept is not new at all. Wills were used by ancient Egyptians. The Testament of Solomon, an apocryphal text dated to around the third century A.D., recommends making a will before leaving for certain journeys in order to ensure that no one can claim your property should you get murdered or robbed along the way.
It was not until medieval England that detailed land records were kept—in fact, there were laws compelling people to make detailed documents outlining who gets what when a person died. They were a novelty in that time and place, but most of the concepts we have today for estate planning originated back then.
