Believe it or not, everyone has an estate. Actually, you don't have to be wealthy to have an estate. Your home, real estate, car, furniture, life insurance, personal possessions, checking, and savings accounts make part of your estate. But the question is, what will happen to your estate in case of death or incapacitation?
To ensure that your wishes are fulfilled, you will need to provide instruction mostly in writing stating whom you want to receive what and when. More so, you would like this to happen with the least amount of taxes and legal fees. That's why it's worth taking time to start estate planning.
Estate planning is making plans in advance, designating who will receive the things you own and who will handle your responsibilities after death or incapacitation. One objective of estate planning is to ensure that the beneficiaries receive the assets with minimal income tax, estate tax, gift tax, and other applicable taxes.
It's important to note that estate planning is not a one-time thing. You should review and update your estate plan as your financial situation, and relevant laws change from time to time. However, navigating this process alone can be challenging, especially with inadequate knowledge about estate planning. That's why you need an estate planning financial advisor.
Many people don't have an estate plan because they think what they own is insignificant or not old enough. Others have no idea where to begin, who to contact for help, or they don't want to think about it. Unfortunately, when a misfortune happens, their families face many challenges in wealth distribution.
One of the basics in estate planning is writing a will. A will directs how your assets will be distributed. However, it does not avoid probate. The assets will go through a probate court before being distributed to your intended beneficiaries. But why have an estate plan?
One benefit of estate planning is peace of mind. Having a plan of your future assets in place makes you feel more confident about the future. You are also sure that your loved ones will be cared for, especially children. Other benefits include:
If you care for your loved ones, the most considerate and thoughtful thing you can do for them is have an estate plan. Many documents are involved in estate planning and legal directives that you may not know. A qualified estate planning financial advisor has the right knowledge regarding drafting the plan and documents involved.
They also have the expertise in managing estate plans to ensure your family's financial future is secure and that your properties are distributed according to your wishes. Working with our financial advisors will help you eliminate planning mistakes like taking the wrong inventory of your assets.
Many people are good at accumulating wealth and funding their retirement plan accounts, but the majority neglect to account for their wealth disposition at the time of death. The five components of estate planning are:
The cost of estate planning depends on the documents you require and their complexity. The type of estate plan you require, the type of legal fees your attorney uses, and the person who does the work on estate planning are some of the factors that influence estate planning costs. It can cost you around $800-$1800 and sometimes run up to $2,000 - $3500 for a lawyer to evaluate your finances and family circumstances and prepare required legal documents. The cost can vary depending on the location, complexity, and other circumstances. There could be additional charges if you have extensive property or small business.
Many people think that a will and estate planning are the same, but there is a notable difference. A will is a legal document that explains how you want your assets distributed after your death. It also details who will take responsibility for your children after death. They also name an executor who will carry out the actions in your will.
On the other hand, estate planning is more complex than drafting a will. While a will is a single tool, estate planning involves multiple components like a will, powers of attorney, medical directives, trusts, and beneficiary designations.
The key estate planning elements include a will, trust, power of attorney, medical directive, and beneficiary designations. The most important factors in estate planning are:
If you need any help with estate planning, contact the financial estate planner at Texas Financial Advisory and let us help you plan your estate.