What is Estate Planning and why is it important?
Estate planning is a process to uncover your goals and wishes to memorialize them in a set of documents.
According to Wikipedia:
Estate planning is the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life, in the event the person becomes incapacitated and after death. The planning includes the bequest of assets to heirs and may include minimizing gift, estate, generation skipping transfer, and taxes.
Planning is insurance against mental incapacity, probate, guardianship, and other court proceedings. Planning protects families and helps keep them together during hard times. It makes sure a person has done all they can to protect and provide for their family.
Everybody has different goals for estate planning that makes planning important to them. Some of the most common are:
- Avoid . Many people have gone through probate with a family member’s loss or seen another family go through the rigors of probate. Probate for most people is almost a traumatic experience. It involves a whole lot of paperwork, time, money, and frustration. It is under the control of a Judge and the State’s laws.
- Protect Minor Children. Parents with young or younger children often want to make sure they are provided for and their money will be used to support them. They also want to name who will raise the children.
- Protect Adult Children. Adult children often suffer from a myriad of problems they need protected from. Those problems include
- Addiction to alcohol, drugs, gambling, or other expensive things
- Poor money management
- Shaky marriages
- Provide for a smooth transition. To reduce family fights, people put their wishes down on paper.
These are just the main reasons planning is important and why you might want to get your estate plan done.