The Importance of Estate Planning

As you reach that point in life where you begin to look at your successes through the years and how you have enjoyed and experienced a lot that led you to where you are now, other things might also come to mind.

You might also begin to think on what will happen to the estate, no matter how small, that you have accumulated and to whom do they go. How this thought will eventually affect you will determine what would happen to your properties and assets in the future.

When concern over your property (and to whom you will eventually hand it to) comes to mind, then it might be time to do some estate planning. Doing such is not as easy as discussing your future plans with your own family and how you would want your properties to be distributed.

Estate planning may require that you put everything in paper that will serve as legal documentation of your plans. Failure to do so can result in an estate lost, properties wasted and brewing conflicts between family members.

Without legal documentation, you can lose your estate quite easily. Without a will to work with or failing to name an executor for your estate, control over who will eventually manage your estate will fall in the hands of the government.

Asset distribution will fall into the hands of the court appointed estate administrator who will determine who will inherit your estate based on the state’s own definition of heirs. Estate administrators may also charge a fee for their service, which can be a percentage of the entire value of the estate which can take a sizable chunk of the value and may cause some friction among the probable heirs.

The work of an administrator of an estate can take time. They would need some time to contact the heirs, collect financial records of the whole estate and determine the rightful heirs to the estate in question. And during the time that this is going on, taxes on the properties continually mount along with debts or other mortgage payments.

While all these payments can also be delayed during the whole process, still the whole estate may suffer due to the cost of additional interest. The costs would usually be reimbursed ove4r the value of the estate. This becomes a problem even more since estate settlements take a long period of time to accomplish. Having a proper estate plan can help protect your heirs from inheriting such a headache.

Without a will, a part of your estate would go to an undesired or unintended beneficiary. With the state given the responsibility of dividing assets among surviving heirs, it will determine distribution of assets according to the order as stated in law. This comes without prejudice as to who it will end up with, giving your beneficiaries no choice over the issue.

A proper estate plan would give you the power to safeguard your estate by stating who the rightful beneficiaries would be, taking the state, in this regard, out of the equation.

 

Posted by Ardent Editor on Mar 18 2008 in Estate Planning

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