Estate planning is an indispensable part of wealth management, mainly if your estate involves substantial possessions or complex issues. When appropriately regulated, an estate plan can reduce the taxes and expenses of your estate, make simpler and accelerate the transition of assets to the next generation and safeguard that your beneficiaries are secured.Estate Planning involves the will, trusts, beneficiary designations, powers of appointment, property ownership (joint tenancy with rights of survivorship, tenancy in common, tenancy by the entirety), gift, and powers of attorney, specifically the durable financial power of attorney and the durable medical power of legal representative.
Importance of Estate Planning: The purpose of Estate Planning is to help us accomplish our personal and family goals even after your demise. It ensures that your wealth will go to those you want it to go to, so you can achieve your personal goals even after you are gone. There are five main goals of Estate Planning:
- Living your life fully: Living your life fully means providing not only for yourself (and your spouse and family, if you are married), but providing for others according to your values.
- Pass on your property to others according to your desires: In order to transfer your property according to your wishes, you must provide for both paperwork (someone to do the paperwork and ensure that your desires are completed) and disposition (the decision of who gets what) of the assets.
- Provide for guardianship of children who are still minors: For most parents, the issue of guardianship is one of the most crucial decisions of the estate-planning process. Who will raise your children should you die?
- Avoid probate if desired, or use probate strategically: Probate is the legal process by which an asset’s title is transferred.
- Decrease or eliminate taxes: Through proper estate planning, you can decrease or eliminate the taxes that must be paid on your estate.