Estate Planning is a process that captures your life’s accomplishments. The system packages these accomplishments gently into one or more legally binding documents. Traditionally, families transfer assets from one generation to the next, providing future generations with a financial advantage.. The planning includes the bequest of assets to heirs, loved ones, and/or charity, and may include legal tax avoidance.
While states may change rules and regulations, the fact remains that failure to plan is planning for failure. You have worked all your life, accumulated successes, but you can’t take any of it with you. Most people have acquired “things ” in their lives and have shared them with their loved ones. People use the term “Generational Wealth” to describe the passing of wealth to the next generation.. Generational Wealth refers to the accumulation and transfer of assets and resources. Keeping it in the family and minimizing negative financial impact is what financial planning is all about. Those assets can include cash, stocks, bonds, and other investments, as well as real estate and family businesses.
Estate Planning documents legally bind and explain to survivors how you will divide or not divide your assets. They also establish one of the most critical aspects of planning. The WHO, whose responsible for carrying out your instructions. The person whose assets are to be divided selects a trusted party and is called the executor. Best case scenario, this person executes your plan to fruition.
Estate Planning Value Proposition
Estate planning also removes the potential for having your estate go through Probate. In common law jurisdictions, the court of law “proves” a will through the judicial process of probate. Courts of law accept estate planning documents as a valid legal document.. That is the true last testament of the deceased. Unfortunately, for this thing called property, without a “Living Trust” the settlement of the estate can be tied up for years. The end result is a lot of cost and unnecessary money wasted in the courts. Court costs can exceed the value of the estate because often, there are warring parties. These parties have, different ideas regarding who should get what and how much they should get.
Bluntly, everyone is going to leave this earth, and death has done more to fracture families. While preparing these documents in advance may not avoid a full fracture, they can ease the pain of your transition.
