Probably, you spend your entire life to work hard for creating assets to ensure your loved ones enjoy each aspects of a better lifestyle. You also worry to make them financially safe and secure even after your death.
And to do so, you need to have a clean and organised financial plan through estate planning. Traditionally, estate planning is thought to be only for the rich and old people, which is not true.
What is Estate Planning?
Estate planning is a financial planning process to transfer your assets and investments down to your generation when you die or are incapacitated. Your assets may include your properties, houses, cars, businesses, investments, insurance policies, and savings. If you die without a proper estate planning, your loved ones may fall into financial complications and may not enjoy your hard-earned assets.
During your lifetime, your estate planning will help you to manage your entire assets. After your death, your estate planning will allow you to preserve your assets and control its distribution as per your wishes.
Partridge Muir & Warren Ltd, located in Esher, Surrey, is an award winning company having a rich experience of more than 50 years providing estate planning and wealth management services.
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Some useful tips for an estate planning
No doubt, an estate plan can help transfer your wealth after your death to the person you wish to give. This does not mean that your beneficiaries will not face any probate court complications.
Here are a few important tips to avoid the complexity and probate of estate planning while ensuring your wealth is transferred to the right person.
1. Create a will to list your all assets
Everything you own is considered as your asset in estate planning. You might have kept some of your assets private and unseen from your loved ones. Hence, you must create a legal will to include all your assets and make your family vulnerable to your unseen assets after you die. Your will clearly clarifies your wishes to ensure that your assets are handled in accordance with your wishes after you die.
2. Nominate Power of Attorney and guardian
You must appoint a most trusted person as your Power of Attorney. It authorizes them to make financial decisions on your behalf when you become incapacitated. They also act as guardian of your minor or young beneficiaries and manage your wealth.
3. Regularly update your estate plan
Your life circumstances and federal laws frequently changes. You may also have new members added to your family. This may lead to change your will to fit these changes. After few years, you may wish to change the Power of Attorney, guardian, and your wealth distribution method due to various economic, social and natural reasons. Hence, updating your estate planning is the most important task.
4. Know your estate taxes
In estate planning, the beneficiaries inherit some assets or wealth, which attracts federal taxes in the form of inheritance taxes. This tax is paid by the beneficiaries after they take over their inheritance.
Hence, you must understand estate taxes to utilise various tax exemptions and relief benefits like gifting and charity trust investments to reduce the tax burden of your beneficiaries.