Losing your wealth, savings, and assets you’ve toiled hard to leave your loved ones is the last thing you want. This isn’t something that you should rule out as many financial predators are ready to manipulate the legal system and pounce on your assets in a heartbeat. Such incidences happen if you get involved in an accident or when your business gets entangled in a legal issue.
Because of this, asset protection and estate planning are essential. Asset protection entails finding ways to proactively safeguard your assets. On the other hand, estate planning involves how your assets will be looked after and protected if you aren’t in a position to manage them or upon your death. Since it’s a complicated process, you should hire a reputable law firm, such as www.milehighestateplanning.com, if you wish this to be done by competent professionals.
Here are the reasons why both asset protection and estate planning are important:
Protect Your Beneficiaries And Decide Who Inherits Your Assets
Asset protection and estate planning were only considered an ideal option for the wealthy. However, nowadays, it’s already essential even for middle-class households.
This is important because most people today have assets in the real estate or stock market. Upon passing away, your wish is to have these assets passed on to your loved ones. At such moments, an estate plan becomes vital to ensure your family’s well-being is secured.
One of the primary purposes of an estate plan is the designation of assets to your heirs. If you don’t have one, you won’t have any say on what happens to your property once you die. Instead, the decision on who’ll inherit your assets will be left to the court.
This is the last thing you’d want for your family as this process takes years and is often expensive and filled with many family disputes. It shouldn’t come as a surprise since the court won’t give the surviving spouse total control over the assets. Moreover, the court has no idea which of your children shouldn’t get access to cash or the one who’s responsible.
If you don’t want your estate to go to probate–a court-supervised process–estate planning is essential. During this process, the court oversees the settling of your outstanding bills and taxes and assess your asset’s value. If you have one, it also entails the authentication of your will. Once everything is settled, the remaining assets will be distributed among your heirs.
This process is time-consuming and takes at least six months, and it’s very traumatizing for your family. It’s also expensive. The reason for this is because it involves settling bills such as appointing an executor or personal representative for your estate who’s paid an administration fee of five percent the value of your assets. There’s also the payment to the lawyer hired by the executor to supervise the proceedings, and they get paid at least the same percentage for their services. This totals at least 10% of your entire estate.
Avoid Too Much Taxation
Even after you pass away, your wish is to leave as many assets for your family to remain financially stable. However, this isn’t always the case, especially if you fail to hire a qualified estate planning firm due to the high taxes remitted to the government. The professionals in these firms are very knowledgeable about local, state, and federal taxes. As a result, they’re better placed to ensure your family gets a sizable chunk of the assets you’ve left behind.
If you have complex assets, such as investments, businesses, and real estate, it’s advisable to hire an estate planning law firm. This is because these specialists know to think of strategies to reduce tax liability and draft a binding document.
Safeguard Your Personal Property From Business Loss
If you own a business, estate planning and asset protection are crucial as it ensures your personal property is safe even if your business gets sued or goes bankrupt. The reason for this is that you’ve safeguarded your assets from being linked to your business.
One of the best ways to do this is by incorporating your company as a Limited Liability Company (LLC). By doing this, you can be sure that your personal property is safe, guaranteeing your loved ones’ welfare.
If you wish to avoid this from happening, hire an estate planning firm to safeguard your assets and your family’s well-being.
Protect Your Young Children
The thought of dying young is one that every parent dreads. However, you need to be open to the possibility of this happening and the impact this could have on your young kids. Thus, it’s important to plan for such a possibility, which entails setting up a will, which is part of estate planning.
Here, you’ll detail how they’ll be looked after and the items they should inherit after attaining 18 years. If you fail to have a will in place, the court will decide who’ll look after your children and who receives your assets.
Asset protection and estate planning are essential but are often overlooked by many. After reading through this article, you’re now well informed of why you shouldn’t take it for granted, especially if you care about your loved ones’ well-being.