Estate planning is an important step to take as you get older. Once you reach the age of 18, you should put together a will and basic estate plan, even if you don’t have many assets. Why? Estate planning helps protect you in life and after death.
No matter your age, estate planning is wise, because it helps prevent your assets from going into probate and from being taxed unnecessarily. Using trusts may help you protect assets during your lifetime and avoid having them counted in your assets for the purpose of qualifying for Medicaid. An estate plan will also establish a health care proxy, so that there will be someone there to make medical decisions for you if you cannot.
What are the benefits of estate planning?
Estate planning has many benefits such as:
- Reducing your tax liability
- Allowing you to pass on items to your heirs or beneficiaries through a will or trust
- Helping your family avoid probate
- Setting up powers of attorney
- Setting up guardianship for your children or dependents
- Creating medical directives
- Setting up beneficiary designations
All of these topics can be addressed in a good estate plan, so that you and those you care about are protected.
Dying can be expensive and time-consuming for your loved ones
When you pass away, it could be expensive or time-consuming for your family. That’s why it’s smart to set up trusts and to have a will in place when you pass. By setting up a will and trusts, you can help your family avoid probate. Probate is a method of determining the distribution of assets in an estate, which is helpful, but it is costly and takes months or years depending on where you live.
The good news is that it’s easy to set up an estate plan and to put protections into place for those you love. Setting up beneficiary designations, creating trusts, working on guardianship concerns and handling your own medical directive are all excellent reasons to get started as soon as possible. Get to know how the laws of your state could impact you so that you can take steps to protect your interests.