Every person has some estate, and if you think you don't need estate planning, you're certainly wrong. But before knowing the importance of estate planning, the first thing to know is what estate planning is. When we talk about your estate, it refers to everything you possess, such as a car, your bank accounts, your home, life insurance, personal possessions, furniture, other buildings, and assets. The biggest reason to have estate planning is that it offers peace of mind. Don't you want to decide what happens with your possessions after you leave this world? Everyone has some family members, friends, loved ones, and organizations they care about. If you want your wishes to be carried out even after your death, you will need to document it. With estate planning, you can mention who will receive your possession and when they will receive it. Besides this, there is more to the importance of estate planning. Here are some:
1. Estate Planning Is More Comprehensive Than Trust And Will
Creating a will is just a step toward estate planning. You should get over this wrong idea if you think they are both the same. A will states what will happen with your assets after your demise. While
Estate Planning also says this, it has more things to offer:
You can appoint a Durable power of attorney to give a person the ability to handle your medical/financial decision when you cannot.
You can mention the Medical directives by which you can choose the medical treatment you will prefer or not when you become incapacitated.
You can assign your beneficiary who will receive your assets and money.
You can gain tax benefits through estate planning.
2. Estate Planning Saves Your Loved Ones From The Probate Process
The purpose of estate planning revolves around protecting your family's time and money by skipping the probate process. Not having a will can get your loved ones in this loop, where the probate court will decide who gets what in your family. Furthermore, this process can take even a year while your estate will pay for the lawyer fees. You can skip this probate process by:
Naming an executor of your estate in your will.
Naming the right beneficiaries (alive) for your investment account.
3. You Safeguard Your Children's Future With Estate Planning
If you don't have a living spouse, there are chances of children entering the foster care system if you don't plan your estate. With estate planning, you can choose a guardian for your children who will care for them after your demise. Also, make sure to add more than one guardian for your children. Estate planning has great significance and importance; everyone should have it for a better future.
