No one really wants to think about what will happen when they die. But as you get older, planning for that event becomes even more important.
Estate planning is the process of getting all of your assets and belongings in order before you pass. This process involves naming beneficiaries as well as deciding who will handle executing your will and last wishes after you’re gone.
What’s the most important step of estate planning?
One of the most important steps in estate planning is getting all of your finances in order. You’ll want a detailed list of all of your investments, accounts and debts. At this point, you’ll want to go through your finances and set aside money to pay for any funeral expenses as well as estate taxes. Otherwise, your family and friends will be in charge of these expenses.
Someone who’s worried about keeping their family from probate court or having to pay estate taxes might look into starting a trust. A trust is an easy way to pass assets down without having to go through probate court, but it can be expensive to set up.
What’s the purpose of a will?
A will is a document that dictates which relatives get what from your estate. For example, you’ll write down in your will whether you want your oldest child or spouse to get the house after you’ve passed.
You can also set up important instructions regarding when and how assets should be passed down. Wills need to be deemed valid by the court of law; otherwise, they open themselves to being challenged in probate court.
What happens if you don’t make an estate plan?
If you don’t estate plan, it can take longer for the probate court to pass down your assets to your beneficiaries. In addition, it can cost more in court fees.
Your family also might get into lengthy legal battles deciding who gets what. Estate planning and writing a detailed will can help keep the peace among your friends and family after you’re gone as well as save them heartache and money.