Estate planning is a process by which a person passes down their assets or properties from one generation to another after their demise. Sometimes, the person may pass down their properties or assets to the people, be it not from their own family. This decision is made during the lifetime of the person. It also determines how the individual’s assets or properties would be disposed of, arranged, and managed. It also includes the making of a will. A will is a legal document that provides instructions, as per the person’s choice, on how the assets or properties of the individual must be handled after their demise. There are various strategies used for limiting taxes on the estate. For further more query about this subject, do consider contacting estate planning in Ridgeland.
Importance of Estate Planning
Estate planning plays quite an important role in determining an individual’s disposal or arrangement of assets or properties. Here are some of the importance of estate planning mentioned below:-
- It ensures that the person’s assets or properties are transferred according to their choice after death.
- It also protects the individual’s assets or beneficiaries.
- It prevents fraudulent activities during a transfer of assets or properties.
- It supports young children in inheriting their parent’s assets.
- It eliminates the family messes between the children if the person has more than one spouse.
Things one Should know about Estate Planning
Before estate planning, one should be aware of all the facts. Here are a few things listed below that one should consider acknowledging about estate planning:-
- Wills and trusts – Wills ensure the property is transferred to the person as per the individual’s wish who is the owner of the assets. Trusts help to limit estate taxes.
- Durable power of attorney – Drafting a durable power of attorney means assigning a person who will transfer the assets on your behalf in your absence.
- Beneficiary designations– There are many cases where the number of possessions is transferred to the heirs without being instructed in the will. Hence, maintaining beneficiary designations play an important role.
- Letter of intent – This letter dictates what is to be done with your particular asset after your incapacitation.
- Healthcare Power of Attorney– It refers to an individual making all the healthcare decisions on your behalf after your demise.
- Guardianship Designations– It refers to picking up a person or a couple as a guardian in your absence when you have minor children.
Estate planning plays an important role in an individual’s life and their children’s life. Hence before estate planning, one should always gather knowledge about how it is to be done.