By the time you reach your 30s, there is a good chance that you have some assets under your name. It can be a car, a house, a savings account, or some cryptocurrency investments that you made. The problem is that while you expect to die of old age, this is not always guaranteed – which may cause uncertainties in the way your assets are distributed.
Surveys show that a staggering 68% of millennials still don’t have a will, let alone an estate plan. However, regardless of age, asset-bearers should still consider setting up one. Here are the main reasons why you should consider an estate plan.
1. Helps Avoid Potential Family Disputes
A family can get along just fine – until someone from their immediate family dies, and they believe they have a right to a part of the estate. Families that had Thanksgiving meals together every year may now be battling each other in court for the property. An ex-spouse may also believe they are entitled to a bigger part of the property.
An estate plan can put these family disputes to rest before they even get a chance to form. You can take your time to discuss with the beneficiaries and see which family member wants to receive what. Depending on the circumstances, you may want to arrange a talk with the lawyer by your side if you have rather difficult-to-handle family members.
2. Protects the Beneficiaries
Your closest family is not always where you intend the money to go. For instance, let’s say that you were married, but you separated from your spouse (without yet divorcing), with your children staying with you. Or maybe you do not have a spouse or kids, don’t get along with your parents, and you wish for the money to go to your siblings.
Estate plans represent a good way to ensure that your assets go where you intend them to. These documents go beyond a will, so if you have an official document stating that your properties should go to someone, in particular, the state will have to respect that.
An estate plan will also follow your precise orders of how your property should be distributed. For instance, you may decide that your children should inherit your assets when they reach the age of 18.
You may even add clauses that can protect your adult beneficiaries as well if they have financial management issues such as gambling debt. An estate plan is a list of instructions that will determine how your beneficiaries are taken care of.
3. Minimizes Taxes for Beneficiaries
California is infamous for the fact that it has some of the highest taxes – and estate taxes are no exception. If you don’t take care of your estate planning beforehand, those taxes will not only end up being passed down to your family, but they can also cause a huge hit on your wealth.
Many Davis estate planning lawyers say that the taxes are too much to bear, which is why the inheritance process gets delayed more than it should. There are several estate planning options that you can set up to avoid this, such as trust funds.
4. Overrides a Pre-Written Will
You probably thought that if you didn’t write an estate plan, then there will not be one by the time you die either. This is where you are wrong. The state does have a pre-written will for you, often referred to as the intestacy statute.
If you die without a will, then the state will take control over your assets and divide them by their own laws, to your immediate family: spouse, children, and so on. The problem is that if you don’t have immediate family, the assets may not end up where they were intended.
Prince Rogers Nelson (commonly referred to as Prince), also died without a will, with no spouse or children to receive his fortune. This raised a lot of trouble for his siblings, whom he was close with. That being said, by setting up the estate plan yourself, you override every document that was pre-written by the state.
5. Ensures Peace of Mind
Having wealth doesn’t always ensure happiness, nor does it guarantee that your loved ones will have a secure future once you pass away. Sometimes, there may be cracks in the rules of the intestacy statute that may cause your loved ones to lose everything you wanted to leave them.
By creating an estate plan, you establish which family members receive what. This way, you will be able to sleep soundly at night, knowing that your loved ones will be covered financially, even if you are no longer there with them.
The Bottom Line
An estate plan will not only bring peace of mind to you but will also ensure the financial safety of your loved ones. For this reason, if you didn’t get the chance to set one up yet, you may want to arrange a meeting with your lawyer.