The topic of death continues to be a taboo for a lot of people. It’s not that they frown upon the concepts of dying and the afterlife. Some just aren’t comfortable with its unpredictability and, at the same time, inevitability.
Nonetheless, the closest thing that you can do to control the circumstances of your death is to ensure that your will is executed according to your conditions. You should organize your testaments as early as possible to avoid problems within your kin or company when you pass away. Your lawyer can help you and your family with a range of legal services, from dividing your estates to settling a trust after death.
Here are the reasons why it’s important to prepare your estate and trust prior to your passing:
1. Ensure Your Beneficiaries’ Inheritance
The primary advantage of settling your legal documents in order before your death is that you make sure that your beneficiaries receive their rightful dues. While you may think that estate planning and writing a last will are only for the wealthy, everyone actually has just cause to prepare their legal documents for their heirs.
An estate pertains to the entirety of assets that you can leave to your family when you pass. For most people, it can be their homes and other real estate investments, such as vacation houses or rental properties, as well as cherished possessions, like jewelry and family heirlooms. You can also leave behind stock portfolios and your bank accounts for your children.
You must create a legal and binding document to ensure that your estate or, in other words, your assets are handed to the right people after your death. In the absence of this type of file, the court makes the decision, and you run the risk of neglecting something that’s intended for a particular beneficiary.
Moreover, the government may already have a pre-written will created on your behalf. However, similar to the scenario above, you still leave the decision to the court. To override this default statute, you must write a valid will for your estate and beneficiaries.
Two legal documents that you should consider for estate planning are the following:
· Will - One of the most well-known estate planning tools is the last will and testament, which provides details on your assets and who should receive them. You must also think about a living will to make provisions for your estate in case of your incapacity.
· Trust - While a will controls the distribution of your assets, a trust can keep your estate out of probate, which is the process of validation for your will and valuation for your assets.
2. Take Care Of Tax Matters
The government can impose hefty taxes on your estate upon your death. While these won’t affect you any longer, these can significantly reduce the total amount that your beneficiaries can receive. You even have the option to pay the tax ahead or arrange it as a gift tax, which entails giving your assets away before dying.
Another viable choice is to take out relevant life insurance, which is a type of business insurance you must have. It’s useful for employees since it’s free from inheritance tax.
Meanwhile, these are the types of taxes that you should understand:
· Death - This tax is imposed on the process of transferring property after an individual’s death. The amount can be based on the total value of the estate or a single bequest.
· Estate - Estate tax, on the other hand, is charged due to your right to transfer your assets to your beneficiaries upon passing.
· Inheritance - Lastly, this type of tax is imposed on the privilege of heirs to receive a deceased person’s assets or properties.
3. Control The Distribution Of Your Assets
As mentioned above, there’s a high risk that your assets might not be distributed according to your preferences if you don’t plan for your estate and trusts before your passing. When you prepare your legal documents for this process, you can override the default will that the government may have created on your behalf.
4. Ensure Business Continuity
Another reason to create a last will and testament is to be able to appoint someone to take over your company in the event of your unanticipated death or incapacity. This way, you make sure that your business can continue operations, and your employees will still have their jobs.
Conclusion
It’s prudent to prepare for the inevitable. When you plan for your estate and trust upon your death, you regain control over the circumstances and consequences of your death. With this, you won’t have to worry about your family and employees once you’ve passed.
