Many people question whether they really need to meet with an estate planning counselor, create a will, or name beneficiaries. Perhaps they just don’t own a lot of assets, or they’re comfortable with allowing the state to apply default actions after their death. Whatever the reason, those who doubt the necessity of estate planning often do so because they lack information about what estate planning actually is.
Transfer of Assets
Yes, part of estate planning involves deciding whom (or which organization) will receive your assets after you pass away. For people who don’t own a lot of assets, or who are comfortable with allowing the courts to automatically transfer those assets to their spouse or children, estate planning services can seem unnecessary. But there is much more to the process than that.
Another very important component of estate planning is often called “life planning”. Even if you don’t care what happens to your assets after your death, you probably do care what happens to them while you’re still alive. Unfortunately, if an illness or accident should render you unable to make your own decisions, the state will often step in and make a plan for you. While it is possible that the court names a close relative to the control of your medical and financial decisions, without a properly designed estate plan the court may instead choose to give a third party or professional fiduciary that control. When you engage in the estate planning process, you take control over that decision in advance, and you can name the person or people you want to be granted that authority.
Taxes After Death
Another important component of estate planning is the consideration of taxes after your death. In some cases, the transfer of assets to your heirs can trigger hefty income and/or estate taxes; a burden you probably do not wish to leave. When you meet with an estate planning attorney, you will learn all of the different options at your disposal for the transfer of assets. In many cases, those excessive taxes can be lessened or eliminated altogether.
Engaging in estate planning can also help you to confront many issues you might not have considered on your own, such as naming backup beneficiaries. Simply leaving a handwritten will can result in many legal complications if your named heirs have passed on before you, or if an accident or natural disaster affects all of you at once. If you have minor children, you will also learn the best ways to protect them in the event that something should happen to both you and your spouse.
As you can see estate planning is important for virtually everyone. Contact Lake Stevens Tax Service or call us at (425) 334-8138 with any questions about the importance of estate planning or to set up your consultation.