Nowadays, it seems like most people devote more time to choosing a vehicle to purchase, planning a summer vacation, and even selecting a place to eat dinner than they do to estate planning—determining who will inherit their assets well after they’re gone. Even though this matter is not as fun to do, without proper estate planning, you can’t really choose who gets everything you worked so hard for.
And make no mistake about it—estate planning isn’t only for the wealthy. Without a plan in place, settling your affairs after you pass on can have a costly and lasting effect on your loved ones, even if you don’t possess an expensive house, large individual retirement account, or valuable pieces of art to pass on.
Below, we’ll give you the top four reasons you should have one and avoid potentially devastating consequences for your heirs.
Real estate planning was considered something that only high net worth persons needed back in the day - that has changed. Presently, many middle-class families need to have a plan in place when something happens to the family’s breadwinner. In the end, you don’t need to be filthy rich to do well in the real estate or stock market, both of which produce valuable assets that you’ll want to pass on to the next generations.
Because, even if you’re only leaving behind a second house, if you don’t decide who receives the real estate when you pass away, you won’t have any control over who gets and what happens to your estate long after you’re gone. To do that, you’ll need to create a professional real estate plan with the help of a local attorney. For example, suppose you live in Sacramento and want to make a real estate plan to protect your beneficiaries. In that case, you should contact some of the best Sacramento estate planning attorneys to help you draft a thorough and legitimate plan that will award your beneficiaries with your assets after you’re gone.
Without a real estate plan, the court will decide who gets your assets, a process that can take several years, racking up expenses, and get ugly.
While nobody really thinks of dying young, you must prepare for the unthinkable if you’re a parent of small children. This is where the will portion of your real estate plan comes in, representing an essential feature of each comprehensive, professional real estate plan.
To ensure that your kids are cared for in a manner you approve, you can name their guardians if both parents die before the children turn 18. Without a will in your real estate plan, the court will independently decide who will raise your children if something happens to you and your spouse.
Drafting a real estate plan is all about protecting your loved ones, which also means giving them protection from the IRS. Essential to property planning is transferring assets to successors intending to create the most minor possible tax burden for them.
Real estate plans can enable couples to reduce a good part or even all of their state and federal estate and inheritance taxes. It would be best to speak with a tax attorney to uncover all the ways to decrease the income tax successors might have to pay. Without a plan in place, the amount that your heirs will owe to the United States of America could be quite a lot.
We all know the most famous family horror story when someone dies, and war emerges between family members and successors. In real life, such events can get pretty ugly and end up in court, with family members fighting one another over inheritance and money.
Well, stopping family feuds before they begin is another reason why having a real estate plan is necessary. In addition, the plan will enable you to freely choose who controls your assets and finances if you die or become mentally hindered and ensure that your assets are handled in the manner you intended.
Determining whether to divide your assets equally or not is one of the critical aspects you should think through. In addition, if you’ve had more than one spouse and children from multiple families, a real estate plan is a must!
In the end, if you want your assets and heirs protected when you can no longer do it, a real estate plan is a must for you. Without one, courts could designate how your assets are split, your heirs can face considerable tax burdens, and even who gets to raise your children after you’re gone.