Thinking about your family’s future after you pass away? It’s always a good idea to start planning early. Your wealth and assets can make a real difference to those you want to support – this can come to fruition with a process called estate planning. It’s not just for the super-wealthy, anyone can benefit.
In this article, we’ll explore what estate planning is and how it could benefit your family before and after your death.
What is estate planning?
Estate planning is the process of arranging what will happen to your assets after you die. This includes any property, investments, pensions, savings, life insurance and outstanding debt. Estate planning with the help of legal experts can simplify the process for you and your family.
Without plans in place, your entire estate is likely to go to your partner or closest living relative by default. Creating a will is part of the process, allowing you to dictate who receives your wealth and assets. Other areas of estate planning include naming an executor to manage the process once you’ve passed, devising funeral arrangements and taking care of any custodial or guardianship issues.
What is the estate planning process?
The process begins with outlining your estate, usually by drawing up a list of all your assets and debts. You’ll need to review and update any retirement accounts and insurance policies to ensure that all the information is correct to assist the process down the line.
Next, you’ll need to designate your executor – this is the person who will oversee the distribution of your assets after your death. It should be someone you trust to fulfil your wishes. You can then write your will, detailing who you want to receive your assets. This could be one person, a selection of people or an organisation.
All this information is then shared with all relevant parties, including your executor. With the guidance of experts, you can financially manoeuvre while you’re still alive to make the distribution as smooth as possible for your beneficiaries.
What are the benefits of estate planning?
Estate planning is key to ensuring that your wealth is preserved for your beneficiaries. Experts can advise you on strategies to minimise taxes, such as trusts and charitable donations. With a clear plan, you can protect the assets that you are passing down. It’s also beneficial to avoid disputes between family members.
Estate planning can be a complicated process, but it’s worth it to ensure you can pass your assets down to the right people. Enlisting the help of legal and financial specialists is recommended because they’ll know the most effective and tax-efficient ways to distribute your wealth.