Estate planning isn’t easy, and thinking of your own death may not be the most cheerful way to spend an afternoon. However, taking a few simple steps now can do a lot to protect your loved ones and yourself in the future. Estate planning serves many purposes, including reducing the tax burden on your estate, allowing flexibility in distributing your assets, and eliminating the likelihood of family disputes.
Some of the most important reasons for having an estate plan boil down to two main functions: protecting your beneficiaries when you die and protecting yourself if you become incapacitated.
How Does Estate Planning Protect My Beneficiaries?
In most states, individuals who die intestate, or without a will, are subject to having their estate go through the courts. This is known as probate and can be costly and time-consuming. Having an estate plan such as a will and trusts minimizes the court’s interference in your affairs, protecting the privacy, time, and money of your loved ones.
Creating a will is also a must for parents of young children. If both parents should die, your children would go to a home decided upon by the state. While this is usually a close family member, it might not be who you would have picked. Having a will in place gives you control over the guardianship of your children if the unthinkable should happen.
How Does Estate Planning Protect Me?
Estate planning is also helpful for you, not just your surviving family members. In an estate plan, we can create documents that protect you if you become unable to make your own decisions due to illness, injury, or age. For example, you can assign a trusted friend or relative as a power of attorney who may direct your affairs in the way you would wish.
You can also create an advanced directive that gives a trusted individual the authority to make healthcare decisions for you. This document can also inform healthcare professionals how you want to be treated.
Should You Hire Our Attorneys?
There are so many options when making an estate plan that it can all seem overwhelming. Please don’t feel like you have to go through this process alone. Reach out to our knowledgeable lawyers today for excellent legal counsel and representation when creating your estate plan.
We recognize that every family is different and that you have unique needs from any other client we may serve. We promise to listen carefully to your wishes so we can craft the perfect estate plan that matches your goals. Call today at (516)-928-6594 to schedule your assessment.
FAQs
There are two primary goals in Estate Plans 1) to avoid Probate; and 2) mitigate tax liability. Estate planning in California begins with a thorough evaluation of an individual's financial situation and personal goals. This assessment helps determine the appropriate estate planning tools and strategies to be employed.
What are the two most important purposes of estate planning Quizlet? ›
Estate planning has two primary goals: to ensure that property is distributed as the owner desires and to minimize estate taxes. Every adult should have a will to: - Ensure that their assets are distributed in accordance with their wishes.
What are the two main components of estate planning involve? ›
Essential estate planning documents
The basic components of an estate plan include a will or living trust (or both), a living will, and a power of attorney for finances and health care (also known as a health care proxy).
What is the importance of estate planning? ›
Besides making sure your assets get to the people you choose, planning can help minimize income, gift and estate taxes, too. Without an estate plan, and specifically a will, the laws in your state will determine what happens to your possessions, and the courts will decide who gets custody of your children.
What are the two primary purpose of planning? ›
The planning helps people in concentrating their efforts on the most important jobs rather than wasting time on the lesser important work. The purpose of planning is also to minimize the cost of performance and eliminate unproductive efforts.
What are the two primary types of goals? ›
A goal is a desired objective or result that an individual or group of individuals wants to attain, usually within a certain time frame. Short-term goals and long-term objectives are the two different categories of goals. Short-term objectives are ones that may often be accomplished within a few months.
What are the two basic components of planning? ›
Planning is the process by which managers establish goals and specify how these goals are to be attained. Plans have two basic components: outcome or goal statements and action statements. Outcome or goal statements represent the end state—the targets and outcomes managers hope to attain.
What is the key to estate planning? ›
Key Takeaways
Common estate planning documents are wills, trusts, powers of attorney, and living wills. Everyone can benefit from having a will, no matter how small their estate or simple their wishes.
What are the two general situations that an estate plan lays out? ›
Estate planning has two general objectives: to ensure that the assets are transferred according to the owner's wishes and to minimize state and federal taxes. People have at their disposal four basic estate planning tools: (1) wills, (2) trusts, (3) gifts, and (4) joint ownership (see Figure 27.1 "Estate Planning").
What are the important factors to consider in estate planning? ›
Factors to Consider When Creating an Estate Plan…
- Understanding Your Beneficiaries' Needs. ...
- Evaluating Your Financial Situation. ...
- Understanding the Impact of Taxes on Your Estate. ...
- Probate and its Role in Estate Planning. ...
- Joint Ownership as an Estate Planning Tool. ...
- Federal Estate and Gift Taxes. ...
- State Inheritance Taxes.
The primary beneficiary is the person or persons selected to receive the death benefit (contributions and interest) in the event of your death. The contingent beneficiary is the person or persons selected to receive the benefit if the primary beneficiary is not alive at the time of your death.
What is the role of an executor in estate planning? ›
An executor of an estate is an individual appointed to administer the last will of a deceased person and carry out the instructions to manage the affairs. They are appointed either by the testator or a court. Executors ensure all assets in the will are accounted for and transfer these assets to the correct beneficiary.
What is the goal of an estate? ›
Motivations for estate planning: Most people engage in estate planning for both rational and emotional motivations. Commonly, individuals wish to provide for loved ones after death and ensure that their property is distributed in a timely manner. For many, the minimization of expenses and taxes is an important goal.
What are the two parts of estate planning the first part of estate planning consists of? ›
Estate planning has two parts. The first part consists of: building your estate through savings, investments, and insurance.
What is the principal objective of estate planning? ›
Estate planning involves determining how an individual's assets will be preserved, managed, and distributed after death. It also takes into account the management of an individual's properties and financial obligations in the event that they become incapacitated.
