Though people purposely seem to delay sorting out the final destination of their assets and investments for after they pass. Here is our take on why this is definitely not an advisable thing to do if you care for the financial security of your loved ones.
Unfortunately, estate planning is a financially smart decision to undertake but is something that does not entertains the majority of us. We never enjoy discussing the events that come after our demise. Some people tend to put aside this process because they believe estate planning is only for wealthy people, which is not true, as we all have assets.
Firstly, what is estate planning?
It’s a higher form of a will as it comprises all of your wishes on how your assets will be divided after your demise or if the time comes when you are unable to make your own decisions.
When you are ruling out estate planning just because you do not like discussing death-related topics or because you think you´re not wealthy enough, you are actually doing something that is not healthy for the future of your loved ones. The impact of avoiding estate planning for your family can be dangerous and costly in the long run.
Does inheritance tax ring a bell?
One of the main purposes of estate planning or having a will is to financially secure both your loved ones through either your estate or investments. That is precisely why you should be aware of tax regulations for heirs which can be high, so estate planning is also focused on helping your loved ones avoid paying unnecessary taxes after your demise.
It is a strategy which will significantly reduce the amount of inheritance tax owed if performed correctly. The critical element here is to have a strategy to lessen the financial burden for your loved ones.
If you don’t perform your estate planning, someone else will do it for you
The worst thing that could happen to your investments and your hard earned assets and money planned for your family is that they end up divided by an external agent designated by the government.
Estate planning is vital to have control over the way your assets, investments and properties are split. A public executor will divide even the smallest amount that is left after a person’s demise, so it is essential to think about the impact it can have if you fail to engage in estate planning.
Now think about the valuables that are not money – your family may have to witness how they are sold for less than their actual value, just because you procrastinated and did not plan your estate, so they have to settle to anything that is being offered, because without a plan there’s no time to think things through. Estate Planning also prevents disputes and allegations between family members.
Who will look after my investments and financial matters?
A supplementary benefit of estate planning comes if you have an investment portfolio that will be lost when you are gone. All the hard work that you had committed over the years, only for your family to have no clue about how to proceed with your investments.
There are two solutions to avoid this: Firstly, you need to estate plan as soon as possible, and secondly, you should start instructing younger family members about these matters.
Estate planning will take away all the worries of not knowing what will happen to your investment portfolio after the inevitable happens. In addition, it allows you to assist in the financial security of your loved ones so they don’t have to seek investments which could prove to be false.
It is best to start your estate planning as early as possible. Remember that you have given a considerable amount of importance to your assets and earnings throughout your whole life, so why should you not consider the events after your passing?
Plus you’ll put them through a lot of difficulty after your death if they are dealing with intestacy law and tax liabilities and a ton of additional fees that can only go in detriment of what your family expects to receive.
Estate Planning is the best formula for you to deal with the future of your earnings and assets and it will provide an enormous amount of piece of mind to your family during hard times.