Why you Should Have an Estate Plan
If you have never heard of or considered an estate plan, you may have since the passing of music legend Prince. As the superstar's death and battle over his estate play out in the public eye, everyone is getting a firsthand lesson in the value of an estate plan. Not only does the lack of a clear estate plan in his case mean there will be a hefty tax bill for the estate, there are likely to be uncomfortable battles in the courtroom between his one blood sister and his five-half siblings. If you want to avoid a similar burden for your family, there is no better time than now to look at the consequences of not having an estate plan.
You Dictate Where your Wealth Will Go?
Without a clear estate plan your wealth may not be distributed as you prefer. In order for your money to go to the people and causes you want it to, you need to lay out your wishes in an estate plan. For example, under Minnesota law half siblings are consider the same as full-blood siblings. This means Prince's sole sister is not necessarily guaranteed to receive all of his wealth, despite the fact that some of his half-siblings have not had contact with him in more than two decades. Moreover, the courts will have to decide who gets how much of which assets.
Relieve Family Tension
Perhaps the most detrimental consequence to the social fabric of those left behind is the tension a lack of an estate plan creates between surviving relatives. While some family members may have been promised certain assets, if that is not spelled out in a formal plan, there is a high possibility of infighting between family members as they jostle to get assets that have value to them, emotionally or financially.
Harmful to your business
Failing to establish an estate plan can be detrimental to the future of your business. Entrepreneur points out that, above all else, an estate plan is important because the business itself is likely your family's major source of income, and that wealth will remain tied up in the business going forward. Additionally, there is also the matter of succession in the business. Your employees deserve peace of mind regarding their futures, and the sense of security that comes with an established plan for the company to carry on after you are gone.
Protect Your Loved Ones
Your passing comes with a lot of expenses, from debt you leave behind to funeral costs. No matter how much wealth you have built up over time, if you do not have an estate plan that sets aside certain assets to cover debts you leave behind and provide a stockpile of cash to cover funeral costs, your family could be left holding the bag.
An estate plan is not something you have to have by law, and in many states there is legislation to deal with assets of an individual after passing. However, those systems are slow and often deprive your family of the full value of your assets. You can avoid these consequences by simply setting up a clear estate plan today.
Contact Indian River Financial Group for more information.