Why Should a Family Put Time into Estate Planning?

Planning for the future is always sensible. This also includes estate planning to protect against different possible eventualities such as divorce or death. There are many different reasons to invest time in estate planning. Here are some reasons why it’s useful to do so:

Planning Who Gets Your Assets After Your Passing

The purpose of will planning is to let you or a loved one plan for who will receive your assets after passing on. It avoids leaving your estate “intestate” which basically means without a living will.

Not having a will can potentially cause all manner of confusion with some disputes lasting years and becoming a legal matter as the different parties fight over the assets. To avoid this distressing possibility, it’s always best to have a proper will prepared that will stand up to scrutiny and in so doing significantly reduces the likelihood of disputes occurring.

Tax Planning for Estates

For larger estates, it stands to reason that the impact of taxes can be substantial. It results in assets being lost for subsequent generations. For families that are intent on creating a generational wealth that unlike most doesn’t disappear by the end of the 2nd generation, it’s necessary to pay some mind to tax planning using professionals to do so.

The idea is to shield assets in a variety of ways. This can be to place them into structures that protect them from the highest level of taxation typical of sizable estates. Sometimes, this includes placing assets into trusts where they’re accessible only by certain people in specific situations and not otherwise.

Planning for Health Care Expenses

Healthcare expenses are costlier than people think. They have led to the ruination of many estates that were unprepared for them.

Planning for what medical assistance may be required, including nursing assistance or the costs of a nursing home, avoids surprises later on. Indeed, no estate plan is going to be accurate when failing to take into account the cost of health care near the end of life. It has that much of a deleterious effect on assets that planning for it, including taking out health insurance and long-term care insurance, proves useful to prevent the estate from being forcefully depleted.

Premarital Agreements

Premarital agreements also fall under the broad umbrella term of estate planning because it concerns maintaining (and not losing) the assets that are held within the (family) estate. These types of agreements aim to broadly lay out what should happen if it’s decided that a marriage is to end in divorce.

The most common points of note in divorce settlements, outside of any offspring, are whether pre-marital assets are up for grabs. An agreement before marriage makes it clear what has been agreed upon, which aims to protect long-held family or generational assets during and post-union.

Estate planning is very useful for individuals and families that are keen to ensure that hard-won assets don’t get lost in the transition. Without doing so, passing assets on to loved ones becomes less assured.