Parents have a responsibility to protect their children and provide them with an environment of love and respect. With so many things to attend to both at the workplace and home, it can be challenging to find time to sit down and think about the future.
Here’s an important question to ask yourself, “How can you, as a parent, protect your children should the unexpected happen?” This is a difficult but necessary question for every parent out there. And this is where estate planning comes in.
Estate planning refers to the process of making a plan in advance and designating whom you’d want to inherit your assets after you’re gone or incapacitated. Your estate, in this case, comprises all your assets:
- Home
- Life insurance
- Automobiles
- Bank accounts
- Real estate
- Personal possessions such as artwork, jewelry, etc.
- Investments
No matter the size of your assets, you won’t take them with you when you pass away. As such, you need to prepare an estate plan, explaining how you want to pass your assets and personal property down.
If you die or become disabled without an estate plan, setting your affairs could easily become expensive and time consuming. The court, not your family, will have to determine how your assets should be used to care for your loved ones. This could have a long-term impact on their lives. You definitely don’t want that to happen-right? Here are three reasons why it’s important for parents to create an estate plan.
1. Estate Planning Protects Your Children
No parent thinks of dying young and leaving their children. Unfortunately, sometimes things don’t happen the way things were planned. It’s important that you prepare for the unthinkable by preparing an estate plan. Without one, your loved ones may be left in limbo.
Regardless of your age, or the size of your assets, estate planning is valuable and will ensure your loved ones have money to cover their living expenses, after your incapacitation or death. Make sure you name a guardian for your children in the will section of your estate plan. This will ensure they are looked after and cared for in ways you approve in the event you die. It will also help avoid costly family court battles that could arise.
2. Minimizes Estate, Inheritance, and Gift Taxes
Estate planning allows you to transfer your assets to heirs in a way that creates the smallest possible tax burden on their side. To some extent you’re protecting your loved ones from the Internal Revenue Service (IRS) while maximizing what you leave behind.
With an estate plan, you’re able to minimize the federal and state estate taxes, inheritance taxes, and gift taxes. As a result, you’ll have spared your beneficiaries a big tax bite. It’s important that you seek advice from a probate lawyer or tax advisor and think through how your beneficiaries will receive each asset and your estate as a whole.
The legal and tax advice you get should guide you through the measures you can take to ensure the beneficiaries lose as little as possible to court fees, estate taxes, and other expenses.
3. Ensures Family Harmony
It’s not uncommon for family members and children to engage in court battles fighting for their parent’s assets. Chances are you’ve heard of such horror stories. Why would you want to create discourse among your loved ones when you’re gone? They are already grieving and need to lean on each other for support, not start fights.
Having an estate plan enables you to designate someone who will handle your responsibilities and control your assets after your incapacitation or death. As a result, all your assets and finances will be handled responsibly just as you intended.
Work with a Probate Lawyer
There’s no better way to protect your loved ones and your assets than preparing an estate plan. Parents with smaller estates and simple wishes can use packaged will-writing programs to prepare their plans. However, if you aren’t sure about the estate planning process or have a large estate, then consult a probate lawyer and/or a tax advisor.
The role of a probate lawyer includes guiding you through the preparation of a will, durable power of attorney, health care proxy, and other fundamental estate planning documents. They will make sure you maneuver the entire process with ease without making any mistakes.
According to Werner Law, a team of probate lawyers in Oxford, CA, You need to know all the options available to you in ensuring your assets are managed prudently and your loved ones receive inheritances without incident. Your attorney can help you think through all the options so you can communicate your wishes clearly. You could end up saving a lot of money from the thorough, informed planning and help of a probate lawyer.
Article Submitted By Community Writer
