4 Reasons Estate Planning Is So Important

As per the study conducted by Caring.com, the estate planning trends for this year have reverted to pre-pandemic levels for the first time. Currently, less than 3 out of 4 Americans have their wills ready. Only 32 percent of them—that is a six percent decline from 2023. The rates of estate planning had been increasing year after year until this year.

In 2023, 35 percent of survey respondents believed that you needed to be wealthy for estate planning to be beneficial, but in 2024, the percentage jumped up to 40 percent. That’s 4 out of 10 Americans who feel this way, something that has increased 21 percent over the past two years.

It might be dull topic but estate planning is one of the most important things that one could do for their family. It manages and distributes assets according to their choices and wishes once they pass. Much more than a will, it is securing your legacy and taking care of those that you love.

Estate planning lawyer Lynard C. Hinojosa says anyone can use estate planning and lawyers can help you avoid the pitfalls involved in drafting a will or establishing a trust.

Learn why estate planning is important to protect your legacy.

Protect your loved ones.

Designing a sound estate plan is one of those things you can do so that your family does not suffer any financial and legal issues once you pass away. A comprehensive estate plan will help you avoid delays if your estate is subject to probate process.

Through thorough estate planning, you are also able to appoint guardians for any minor children, ensuring that their care is entrusted to those in whom you have confidence. This choice can help provide reassurance that, if anything should happen to you, your children will be taken care of by loving and responsible individuals.

In estate planning, minimizing the allowable taxes and expenses your estate can incur in order to preserve assets for your beneficiaries is taught. 

Minimize estate taxes.

Estate tax planning is undoubtedly an area where you can use the smart financial planning option to minimize your estate taxes. You can take advantage of the annual gift tax exclusion. By making gifts to your loved ones while you are alive, you can lower your estate’s value, which will be taxed after your demise.

By establishing trusts, such as irrevocable life insurance trusts or charitable remainder trusts, your estate taxes can be reduced. 

Another way to reduce estate taxes is to maximize benefits for married people. Any property transferred to a spouse at death will qualify for an unlimited marital deduction, which means property could be transferred to the spouse tax-free. Depending on its structure, your estate plan can be helpful in making the estate pay less tax.

Avoid Probate Hassles

Probate can be a lengthy and costly legal process where the court oversees the distribution of your assets after you pass away. In South Carolina, family members need to file probate within 30 days but the state mandates that it be filed within 10 years of the date of death. 

Not submitting within this time frame could lead to problems, such as losing the right to manage the estate and give the assets according to the deceased person’s wishes.

If your estate goes to probate, your financial information will be made public. Having no estate plan means your assets can be viewed by people you want to hide your financial details from.

Ensure your wishes are honored

In creating a comprehensive estate plan, you get to specify how you want your assets to be distributed, who is to take care of your minor children, and what you want to happen medically if you are incapacitated.

In clearly expressing these wishes, in wills, trusts, or advance directives, you provide a map for your loved ones to follow when the time comes, not only to avoid family disputes but to see that your assets end up placed where you want them.

Having no estate plan may just be all working against you. It can possibly lead to confusion, conflicts, and undesired and detrimental results. Taking up time and preparing a well-thought-out estate plan will be great for your family’s peace of mind.