03/29/2019: Why You Need an Estate Plan
Peoples Bank is here to provide some useful information on estate planning. At any stage of your life, you might begin to wonder what your estate consists of and how it will be distributed. We’re going to answer these questions and touch on some key areas that will help you create the right plan.
What is Estate Planning?
An estate plan is defined by Merriam-Webster as the arranging for the disposition and management of one’s estate at death through the use of wills, trusts, insurance policies, and other devices. In shorter terms, it’s a group of legal documents that specify what you what done with your assets. It is important to understand that an estate plan could (and should) be executed well before you die, and it requires specific legal documents.
Besides obvious things like bank accounts, real estate, vehicles, and other smaller belongings, you will need to allocate intellectual properties. Maybe you wrote a book or developed a presence on social media; these are all a part of your estate. Any remaining debt you have will also need to be included in your estate.
Everything will be passed along — owned or owed.
Managing your assets properly will serve a great purpose down the road for your loved ones. Leave them with fond memories instead of financial headaches.
Estate Plans Let You Plan for Your Needs
Your asset management is applied in instances other than death. This is one thing that should encourage you to take the first steps in organizing your estate. Readiness is the best way to ensure your estate will be protected if you become ill, incapacitated, or in any circumstance where you cannot make decisions for yourself. If these instances occur, you AND your family will know that needs are being met.
It Means YOU Control Where Your Money Goes
Without implementing a documented estate plan, the state where you live is often responsible for your where your assets end up. You can avoid this by taking initiative and creating a plan well before the state is given any control. With a legally bound plan put in place, your family will have the peace of mind they deserve, and there will be no disputes over who gets what! Your money will be put into the form of trusts, ensuring that it is safe and inherited by the intended individual(s).
Estate Plans Minimize Transfer Taxes
When it comes to the transferring of your estate, taxes will be applied. There are certain methods you can use to efficiently move your wealth.
Three taxes will affect this process: the estate tax, the gift tax, and the generation-skipping transfer tax.
The IRS caps the amount of wealth that can change hands before it is taxed. An adequate plan will be sure to minimize this amount. This will not only preserve your wealth for loved ones, it will allow them to absorb any tax revenue that remains!
Philanthropy
When life comes to an end, your estate can serve as a memorial in some form. Supporting a charitable cause within your plan is a great way to honor your family and help those in need. Whether you create a foundation or simply donate to your favorite philanthropy, this is the perfect moment to be gracious and take control of your legacy.
Prepare the Next Generation
No matter how big or small your family is, your estate gives them a chance to be involved and learn more about handling wealth. This sometimes-painful process will be much easier for future generations if your plan is properly executed. If your estate establishes knowledgeable financial practices, it sets a good example for your surviving family.
In Review
Estate planning can seem difficult to start, and you might feel hesitant or overwhelmed. The idea of passing is a hard thing to imagine, especially when that day seems very far away. Remember, estate plans can be needed in other scenarios. It is best to make sure you begin this process on your own time and allow yourself to reflect. While these legal documents serve as your final wishes in some respects, the benefits your loved ones receive will be plentiful.
Being prepared is the best policy.
With the advice of an expert, you will be able to maximize the potential of your wealth. To learn more about estate planning and controlling your assets, visit any of our locations in Cuba, Steelville, Sullivan, or Bourbon, or visit www.peoplesbk.com.
