Everyone thought about the future once and what they will leave behind. Sometimes what we build we won’t be able to take care of because of other problems. An estate plan helps you prepare for these situations. Your liabilities or assets will be left behind you someday and you need to assure that they are divided as you wanted.
People don’t have much knowledge about estate planning in Northern Ireland so it is beneficial to browse through the internet and prepare in advance. Preparing a will is the most common estate planning task but there is much more to it. Disability is one situation that can happen where you need to make some medical decisions that can be prepared earlier. You will also need to know who you trust and who will be responsible for your estate taxes.
Why People Need It?
Everyone has some kind of property, it doesn’t have to be a lot but still, it has to be given to someone else after some time. This may include your life insurance, your investments, car, home or anything you own. So the question is what happens to it when you can’t use it anymore. Most common reasons why people build estate plans include avoiding placing a burden on their families, leaving assets to a cause or institution, they want to preserve wealth or they want to make sure their kids are provided for.
Making a will can mean a lot to your relatives because there are different ways the state may divide what you have left behind. In most cases, people want their immediate family to get their stuff but there are cases where they want to split assets among friends and family. It isn’t anything new that family members argue because of this so will is something essential here.
Read more about it here: https://www.thebalance.com/top-reasons-why-you-need-an-estate-plan-3505444
The problem is when you have a company and you don’t have immediate family. The assets will be given to your third cousin’s for example which you maybe don’t know and they will make decisions about what to do. This may also lead to disagreements when there are multiple representatives. The best reason why people do this is that they don’t want to leave their family with doubts or second-guessing about what you wanted.
What The Plan Includes?
The first thing mention is a will that helps you divide your liabilities and assets in the event of your death. If you have a lot of kids but there isn’t anyone close that will voluntarily take care of them, you can identify a guardian to be responsible for them. This may also include parents or pets. A medical directive is also a part of the plan where you will choose an individual that will be responsible for making decisions on your behalf.
If you own a business, you will need a durable power of attorney which will have the authority to health-related, financial and legal decisions. This can be really important because if your family members need to make these decisions and they don’t have the knowledge, many things can go wrong. Funeral arrangements can be very tough because the family is going through hard times and they need to think about many details so having it arranged in advance will mean a lot to people closest to you. Click here to read more.
When to Set Up an Estate Plan?
It’s always good to have an estate plan but there are some situations where everyone will recommend you do it because of the assets you possess. Some of the situations that will motivate people to do it include buying a larger asset, deaths or births and marital status. As you gain more wealth, your estate plan will be more complicated.
You can divide this wealth into a few segments starting from $0 to $150k which involves smaller estates but you would want to have a plan in case of emergency. When you go up to $2M, you will have a more complex plan which is also more expensive. Up to $10M in wealth, people will most likely consider a living trust to minimize or avoid probate. Above $10M, the federal estate tax is a possibility so it will be very important to have a full plan to lower the estate tax burdens.