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4 Reasons Everyone Needs Estate Planning

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Regardless of what stage you’re at in life and what your current financial situation is, experts strongly recommend that you have an estate plan in place. Here are just a few of the reasons. An estate plan enables you to:

1. Continue to provide for your children and loved ones after you’re gone. If you’re thinking about creating an estate plan, this is most likely your main motivation. With an estate plan, you can not only pass along your financial assets to them but also help them manage those assets in the best possible way. In addition, your clearly stated intentions can minimize potential misunderstandings between your heirs over how to divide your assets, which can lead to long, protracted arguments and expensive legal battles. And if you have underage children, an estate plan helps you control who gains custody of them.

2. Minimize taxes on your estate. An estate plan reduces estate and gift taxes and other associated expenses caused by the transfer of your assets, maximizing the total value of your estate. Wealth transfer taxes can be a burden on your heirs and delay the distribution of your assets. Additionally, wills and living trusts can act as financial safeguards, preventing creditors from seizing any or all of their inheritances.

3. Prevent the decision from being left to the courts. This long and costly process would be a drain on your loved ones’ inheritances as well. And it can tear families apart. A will or living trust also protects the privacy of you and your loved ones. Estate plans are confidential; when affairs are settled in probate court, the resulting decision becomes public record.

4. Plan ahead in order to create the best possible future outcomes. In short, all of the above reasons are examples of why it’s important to exercise strategic foresight. It’s never a wise idea to leave things up to chance. Without a strategy in place, the future is unpredictable at best, and it’s highly unlikely that the optimal outcome will simply occur on its own. However, with a little strategic foresight, you can work toward the creation of the best possible future for your assets and for those that you care about. In short, if it matters what happens to your property after you pass away, who receives it (and when)—and, if you have underage children, who will receive custody of them—then you need an estate plan. And remember—the actions we take (or don’t take) in the present determine the course of events in the future.

One last thing to mention: When planning ahead and looking to the future, get advice and assistance from professionals that you trust, and learn all of your options. To begin, talk to an attorney to find out whether a will or a revocable living trust is best for you.

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