After building up assets, you want to ensure that they get properly allocated once the end of your life arrives.
For many, that forward-thinking remains a difficult task. In a recent survey by Caring.com, 63% of people making more than $80,000 cited procrastination as the reason for not starting estate planning. If you have not started the process, consider the three benefits of doing so below.
1. Cover your needs
When you no longer can make decisions for yourself, an estate plan allows you to decide who will take on that role. You should name a power of attorney to make legal and financial decisions as well as a healthcare proxy for medical decisions. By doing this in advance, you avoid leaving your family in a lurch and risk them being unable to make decisions in your best interest.
2. Protect your beneficiaries
From property to stock portfolios and more, not having an estate plan means the courts decide where to allocate your years of hard work. Unfortunately, not even a spouse will automatically get all assets. If the family has some strife, the court will not know which sibling should or should not receive cash. Additionally, an estate plan lets your family avoid a lengthy court process that takes time and money.
3. Minimize your taxes
Having built up wealth, you want the next generation to get the most possible. An estate plan allows you to transfer assets to reduce the tax burden on beneficiaries. Without one, your loved ones face dealing with higher inheritance, state and federal taxes.
Developing an estate plan provides protection for your hard-earned wealth.