What is Estate Planning and Why is it Important?

 Estate Planning is the process of protecting an individual’s assets and possessions in the likelihood of death or incapacitation. This process includes dividing and assigning assets to heirs and beneficiaries, the execution of final wishes, and the settlement of any relevant estate taxes. 

Contrary to popular belief, estate planning is not limited to rich individuals who have several properties and assets that need to be divided accordingly. As long as you have assets and possessions that you want to hand down and beneficiaries who you want to protect in the future, you should consider estate planning while you are still of sound mind and body. 

Why is Estate Planning Important? 

No matter what your stature in life is, estate planning, if done now, can prevent a lot of problems in the future. If you still feel like estate planning is not relevant to you, here are some points you need to consider: 

Estate planning can protect your loved ones 

If you are the breadwinner or provider in your family, it only makes sense that you protect your family in worst-case scenarios. If something happens to you, what happens to your family? It’s normal to be concerned about your loved ones’ well-being - this is the reason why insurance plans are also in demand. 

Without an estate plan, your assets will go to whoever the court decides after your death. This means you have no control over who gets what. Even if you put it into writing or talk to your family about your wishes, there is no guarantee that those will be followed. The court will decide where your assets go - a process that will take up a lot of time. Lengthy processes usually mean a lot of legal fees to be paid and a lot of squabbling between family members. 

Protect Your Beneficiaries From Costly Taxes 

Estate owners are required by law to pay an estate tax, which is based on the value of their assets. If you don’t have an estate plan, the court will divide your assets according to their discretion, and your beneficiaries have to assume the burden of these taxes. If your heir inherits a revenue-generating asset, they’re also required to pay income taxes. 

For heirs and beneficiaries who are unprepared for this distribution of assets, paying estate taxes might give them more grief in the future. Settling your taxes now and finding ways to lower your estate taxes can save your loved ones from future financial responsibilities.  

Estate Planning Prevents Unnecessary Family Drama 

Families usually come together at the passing of a loved one or if that loved one is bedridden and incapacitated. However, some relatives who've been absent for most of your life may come out of the woodwork once they hear of your demise. As much as we hate to admit it, some relatives make their presence known in anticipation of the eventual distribution of assets. 

If you don’t plan your estate and document in detail who should get what and the conditions for them getting it, the people you leave behind may squabble over it. If you do not make your wishes known legally before you die, the court will decide for you. During this lengthy court process, fights may break out between beneficiaries, with each party filing a petition to justify why they’re more deserving of the assets. 

Conclusion 

Even if it’s just a house, a car, a stock portfolio, or a small business investment - as long as you have assets or possessions, it’s better to create an estate plan while you’re still of sound mind and body. Careful planning now will ensure that you can protect your loved ones and prevent family drama in the future. 

Estate planning is a great idea to both avoid probate, and to prevent fights and family conflicts over the deceased intentions.  John Miller, our founding attorney, created Rock Solid Law to focus on the unique needs of the Jacksonville and Beaches area business community. For over 30 years Rock Solid Law has provided expert guidance and advice to clients in the areas of Estate Planning, Trusts, Wills & Probate, Real Estate: Residential & Commercial, Closings, Title & Escrow, and Small Business Representation. 

If you have questions about estate planning, contact John Miller at Rock Solid Law to help you.