Estate planning is not reserved for the rich and famous. If you have assets and want to leave an inheritance or items to a beneficiary, the safest, cheapest, and most stress-free way to do that is with an estate plan.
Reason #1: Asset Protection
One of the most crucial documents necessary to protect your assets and secure your wishes after death is a will. Without a will, the state may take possession of some of your property, or your assets may not go to your family members.
In North Carolina, a will allows you to name a guardian for minor children, designate beneficiaries, appoint representatives to manage your estate, and select a power of attorney to fulfill your final wishes. Formal wills signed in the presence of at least two witnesses are indisputable meaning certain parties cannot dispute your will after death.
Writing a will also forces you to consider your estate and final wishes. It may seem morbid, but drafting a will is the same as leaving a letter to your loved ones reassuring them of your love and that they will be cared for.
Trusts can also be established during estate planning and provide asset protection. For example, assets in a trust are free from probate and can only be accessed by the trustee. There are also many types of trusts to fit your unique needs. Additionally, when you create a trust, the assets in question are private, and only accessible by you and the trustee.
Reason #2: Debt Management
Unfortunately, most of us have debts whether they be medical, student loans, mortgages, or consumer debts. When a person dies, their debts are not erased. In most cases, the deceased’s assets will be used to pay off remaining debts and the remainder will go to the beneficiaries.
With an estate plan, you can create plan and resources for debts you may accrue before your death. One way to do this is by choosing a comprehensive insurance plan. Many insurance policies offer payouts that can cover funeral costs and other expenses so your family can focus on your legacy.
Reason #3: Cost
The most expensive way to handle an estate after death is through probate. Probate is the process an estate must go through if there is not a will or adequate estate plan to direct the management and ownership of the estate. In many cases, probate involves legal action and a consult from a financial advisor – both of which can add up quickly. There are also no guarantees for how long probate lasts or how much of the estate will be liquidated.
It is better and more cost effective to create a comprehensive estate plan that is easy to follow and indisputable. Once you have a plan, your estate can pass to your loved ones instead of being picked apart by the state.
Reason #5: Peace of Mind
While it is not preferable to think about life after death, planning can give you peace of mind you never knew you needed. An estate pan is so much more than just a collection of documents and records. It is the sum of your legacy and the future for your loved ones.
Life happens so quickly, and the future is unpredictable. Creating an estate plan at any age ensures that your assets, interests, and estate are taken care of and that your family can celebrate your life instead of trying to scrap together the remnants of your estate.
Do not wait to make an estate plan. Contact Oak City Estate Planning and secure your future today.