Taking a proactive approach to passing on your assets now can help bring peace of mind to you and your family in the future.
When it comes to estate planning, it’s all about focusing on your loved ones and their future. Estate planning isn’t just for the rich and wealthy, it’s for anyone who wants to have a more secure outlook for their family. Without a plan in place it could leave your loved ones in limbo financially.
Here’s a couple reasons why you should have an estate plan to help avoid financial consequences further down the road.
1. Estate Planning Benefits Beneficiaries
Estate planning is one of the most important things you can do to provide for your family into the future—no matter your age, health status or net worth.
Many Iowans might feel they can wait until they become seriously ill, old or unable to decide on how to divide their assets, set up a trust or legally decide whom to leave the house to. It’s better to plan ahead and utilize a Fiduciary to help you plan for any scenario with estate planning. After all, you don’t have to be rich to do well in the stock market or real estate, both of which produce assets that you’ll want to pass on to your heirs. Even if you’re only leaving behind a home, if you don’t decide who receives the property when you pass away, you won’t have any control over what happens to it.
Typically, what happens for someone without an estate plan in place, a court will usually automatically rule that the surviving spouse gets everything. This is a process that can take years, and ultimately becomes a huge expense for families left behind. It’s always best to be prepared and assign someone to take on your house, car, inherited belongings, or any other items of value.
2. An Estate Plan Can Spare Taxes
A good plan should be designed to help avoid probate, save on estate taxes, help reserve protect assets if you need to move into a nursing home, and appoint someone to act for you if you become disabled. A lot of times people assume they can simply download a document online, when in reality, it’s more complex than meets the eye.
Estate planning is all about protecting your loved ones, which means in part giving them protection from the Internal Revenue Service (IRS). Even just a bit of estate planning can help enable Iowans to reduce much or even all of their federal and state estate taxes and state inheritance taxes. There are also ways to decrease the income tax beneficiaries might have to pay. Without a plan, the amount that your heirs will owe the IRS a large sum of money.
3. An Estate Plan Eliminates Family Messes
Estate Planning can be emotional for a family. Sometimes things will go awry, and it’s best to be prepared for the worst outcome. At times, when someone with assets dies, it can take a toll between family members. One person may think they deserve more than another, or may think they should be in charge of the finances even though they’re notorious for accumulating debt. This oftentimes can get ugly and results in going to court with each other.
Stopping fights before they start is yet another reason why an estate plan should be necessary. This will help enable you to choose who controls your finances and assets if you become mentally incapacitated or after you die and will go a long way toward quelling any family strife, and ensuring that your assets are handled in the way that you intended.
It also will help you make individualized plans, which can help reduce stress for everyone involved. Deciding whether to divide your estate exactly equally is one of the key tasks you need to think through. And, of course, if you’ve had more than one spouse—or have children from more than one family—an estate plan is even more complex and the need for personal wishes should be planned out as soon as possible.
Effective estate planning can help you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and help ensure that they’re carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.
Although estate planning can be a complex task, a well-informed plan can make a big difference in what is left for your loved ones. Be clear about who would be making decisions on your behalf. Introduce your designated power of attorney for property to your Fiduciary advisor experienced in estate planning. And finally, discuss your wishes with everyone present and help ensure all conversations are properly documented so that your attorney and Fiduciary will all be on the same page.
For more information on Fiduciary services and Estate Management in the state of Iowa, reach out to your trusted Iowa advisors at Johnson Wealth Income Management here today.
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