Waiting until retirement to plan your estate can have devastating consequences. Despite these consequences, many fail to plan while they are young. But without an estate plan in place, you will not be able to control where your assets go. Rather, you will be affecting your loved ones with this responsibility which can lead to disagreements, costly court proceedings and more.
If you are still wondering why you should begin planning while young, continue reading below where the most important reasons are outlined.
Reduces Taxes
Any money that is left behind following a person’s death will be subjected to inheritance taxes at the state and federal level. In this situation, the amount of taxes that will be owed on the money is likely to be substantial.
For this reason, estate planning is important to reduce the amount that is taken away by taxes. Planning ahead helps protect this money by reducing the amount paid in taxes. You will be able to reduce this by setting up a trust account for the heir to receive the funds. Trust accounts don’t have estate taxes placed on them, which can help to reduce or eliminate the amount of taxed inheritance.
Protects Beneficiaries
Planning your estate is the best way to protect beneficiaries. This protection is essential when there are minors involved as they will have to have a guardian or conservator appointed to them. If you do not have a plan in place for this, a guardian will be designated to them by the courts. The designation process can result in costly legal fees, and family disagreements with who should care for the child. Plus, having no control over the outcome can cause the child to be placed in an unfamiliar home.
Planning your estate can also help prevent your assets from going to unintended people. Leaving your estate in the hands of the courts can take years and result in disappointment for your loved ones.
Assets Remain Safe
An estate plan helps to keep the assets you have secure. This security comes from the process of asset protection planning. During this process, you will be able to designate certain assets that can never be taken away from you. Meaning, your property is safe from anyone who wins a lawsuit against you or creditors’ that are owed.
Asset protection planning can take years to solidify by the courts which is why you should begin young. For this reason, is essential to do long before retirement. Otherwise, waiting for this process during retirement leaves you susceptible to unexpected lawsuits and reversals.
Avoids Disappointment
Estate planning should be done while you are young to prevent disappointment. The most common disappointments that come from not having a will are family disputes. These disputes often occur when one family member believes they are entitled to more of the estate. However, without a will it will be up to the family to fight their case in court.
You should also plan your estate while young as there is no guarantee you will live to retirement or be mentally capable during it. For this reason, failing to plan for unexpected circumstances can leave your assets and loved ones at risk.
Ultimately, there is no reason to wait to retirement to finalize the details of an estate. Rather, proper estate planning should begin early to prevent disappointment and delays. If you need to plan your estate but don’t know where to start, get in touch and a member of our team will be happy to help.
