In life we all face many challenges and there is nothing more trying than having to sort out your affairs upon your death. We all have an ideal, that any money that you have amassed over the years with be left to those that you care the most about. However, all too often we have not planned our futures in time and many aspects of your estate may not have been dealt with, which therefore makes it difficult for those who are left behind. Below we will outline why you should have an estate plan in place and what it is involved in estate planning.
Your Estate Size
The size of your estate can affect the way in which your estate is legally handled. For example, larger estates are liable for more taxes and charges and are often more complicated in nature compared to smaller estates. If you have property, it is worth contacting some estate agents to value your property and a property manager from a property management agency to then take over with the sale side of things. Once you are happy with the valuations that you have received for your property, you can now look at getting a home property management company to manage your affairs for you. It is also worth bearing in mind that it is good practice to get a builder’s report for any property or properties that you have as this will give the people that are inheriting your property the peace of mind that they will not have any headache or costs resting on them.
Depending on the size of your estate, there is usually a tax liability to pay. Around the world, there are different rules and regulations that are in place related to inheriting money. Contacting an estate lawyer is the best way to obtain advice and information on how to best deal with your affairs. Even if you have a relatively straightforward case of one property and material effects, there still needs to be a solid, robust plan in place so that any beneficiaries have a stress-free situation when you pass away. It is hard enough dealing with a loss and grief without having to deal with messy affairs related to an estate.
Children / Future Children
Your children are often the first in line when it comes to inheritance. Therefore, if you already have children it is worth having a conversation about their inheritance with them, so that everyone is aware of your decisions and wishes. If you have no children at present but you may do so at some point, you need to make sure that they are included in your estate plan and in your will.
If your children are under the age of eighteen, having an estate plan would be highly recommended. The reason for this is because any money is often held in trust until a child turns eighteen and some cases, the plan can initiate regular payments when your child hits specific milestones in age. For example, eighteen years of age, twenty-one years of age etc and the money is then fed to them in stages.
To Keep Affairs in Order
Having a complicated estate or leaving things unfinished will only give your beneficiaries trouble when it comes to inheriting. It is important that any outstanding debts are dealt with and a clear plan is put in place for any properties, assets and personal effects that you may have. It is not worth leaving leave things to chance because if you have a particular wish or request, this may not be fulfilled legally as it’s not been noted officiated. Try not to over complicate matters related to your inheritance.
To Protect Beneficiaries
Having an estate plan in place will help to protect your beneficiaries. There are two reasons why people use estate plans to protect beneficiaries:
– Adult Protection: this will help the beneficiary with their inheritance. It will help them avoid making bad decisions, creditor problems, outside interference and divorcing spouses.
– Protecting Minors: young people don’t have the maturity to deal with inheritance and therefore they are protected in this aspect.
To Avoid Probate
It is becoming more and more popular that people are now giving over their inheritance to their children and family before they actually pass away. This is to avoid any charges and taxes which arise through probate. This also eliminates solicitors being involved and having to work out who inherits what. Even in a case where an estate has not been contested, it can take over twelve months for an estate to be settled and there is no guarantee that it will settle in the way that you would have wished.
An estate plan is imperative if you wish to minimise any concerns related to privacy that you may have. When somebody’s estate is in probate, information can be accessed by the public. Therefore, this can affect your privacy. It is also worth noting that other relatives and creditors can access these records and are able to make challenges to your estate, via the courts. If however, your estate plan is robust, then these challenges and claims will be thrown out of court.
If you wanted to make a charitable donation with your estate, having an estate plan would be the best way to go about this as giving an estate to charity is not something that would happen under normal circumstances. This is unless it has been specified in your estate plan.
It is clear that there are many reasons for having an estate plan. Although we may think that this issue may never affect us, it affects everyone at some point their their lives. An estate plan is a relatively simple thing to organise and the benefits of it are far reaching.