Getting an estate plan is incredibly important. Many people procrastinate getting their plan because they think it only involves naming a guardian for minor children if they pass away. This is not the case. Instead, getting an estate plan is very important to your personal and financial well being. Here are 2 things that you might not know about an estate plan.
1. You Can Save Money On Taxes With An Estate Plan
Did you know that when you or a loved one passed away everything you own will be taxed? This is called the estate tax and it can be very expensive. In fact, if you are not careful, your family could lose a great deal of money simply on taxes after you die. This generally happens when the estate has to go through probate. In order to avoid probate you need an estate plan.
An estate-planning attorney will help you know how you can save money on estate taxes, so that your family gets more of your hard-earned money. For example, they might set up trusts, have you gift some money before you pass away, put the money in joint bank accounts and much more. This will ensure that your family gets more of your estate without all the taxes.
2. You Must Name A Medical and Legal Power of Attorney
Another important part of estate planning is getting someone named as your medical and legal power of attorney. If something were to happen to you, like you were in an accident that precludes you from making a coherent decision, someone would be named as your medical or legal power of attorney.
A medical power of attorney means that this person will make all of your medical decisions for you. Thus, if you are on life support, this person chooses whether or not to continue the life support. If someone who does not believe the same things as you is court appointed as your medical power of attorney, they might make decisions you do not agree with. This is why it is important to appoint someone while you are healthy, that you know shares your similar views about medical treatment.
A legal power of attorney (such as Stuart W. Moskowitz, Esq., CPA) will make all your financial and legal decisions for you if you are unable to. This means they will make choices about your children, how your money is spent, and so much more. You should make sure you appoint someone who has your best interest at heart.
These are just two ways an estate plan can protect you.