When to Use Estate Planning and Trust Services
Estate and trust planning needs are critical.
No one enjoys talking about death. Especially, when it comes to what will happen to your assets after you pass. However, these discussions are necessary. If not, critical to have with a professional.
Failing to prepare your estate and trust can have disastrous consequences. That’s because family members won’t know what your wishes are. This puts assets, finances, burdens, and health decisions all in their hands.
So, when should you consider using the estate and trust services of an advisor? The answer is right now.
To Protect Your Children
You love your children. So why wouldn’t you protect them when you’re gone? Even young parents should have a plan of action in place. After all, we don’t know what the future will bring. Therefore, it’s better to plan ahead so you know for certain their future is secure.
Schedule time to sit down with an estate planner and think of everything you would want for them. Be sure to ask yourself the tough questions like, who will they go to if both guardians die? How much money would each child get? How would it be distributed to them? Not answering these questions guarantees they’ll face uncertainty in the future. All due to a lack of planning.
Limit Tax Burdens
Once you are gone, all of your assets will be transferred. Of course, this transfer will go to whomever you determine the heir to be. But, failing to think ahead can cause your heir to incur hefty taxes from the IRS (known as the ‘gift tax’).
Depending on your financial situation and preference, you can select from different types of trusts. All of which are for specific outcomes and goals.
Prevent Family Disagreements
No one wants to leave behind a mess. But, those without an estate or trust plan will be. Without direction, family members can feel entitled to certain assets. If the others don’t agree, lengthy court proceedings can follow.
So, think of how you would like assets divided. Sometimes equally splitting things is not the most reasonable response to a person’s circumstance. That’s why sitting down with a professional, like us at A.P. Accounting & Tax Services is needed to walk you through these tough questions.
During the discussion, things you hadn’t thought of before might be brought up. For example: if you have a sick relative, or want to compensate certain people for providing additional care in your later years. Thinking of this early is critical.
It is also necessary to remember that disagreements can happen if you become mentally incapacitated. Although no one wants to think about this unfortunate circumstance, you should prepare for it. Be sure to consider who will be given control of your finances, assets and medical decisions. Or you and your family could suffer.
Communicates Your Wishes
Without an estate plan in place, you are jeopardizing yours and your family’s future. You don’t know how the family will respond in an emergency. And, you especially don’t want them to be left paying additional fines, taxes, and interest on assets or money.
But, how is anyone going to know what you wanted without a will? And, how will anyone know what to do if you’re mentally incapacitated?
So, take the time to write down exactly what you want to happen today. Be clear and concise with the wording. And, be sure to have any decisions reviewed, notarized and saved by a lawyer.
Ultimately, estate planning is critical. Regardless of how much money, or how valuable your assets are, everyone should have one prepared. If you’d like to speak to a professional about options available to you, get in touch with us today.
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