We’re usually so caught up in our everyday lives that we often forget what’s important. We’re chasing so hard after that job promotion, new car, bigger house, etc. that we forget it could all end in a moment.
And if we haven’t taken the time to prepare for that inevitable end, our loved ones could find themselves overwhelmed by legal procedures, uncertainty, ignorance of many of the assets we worked so hard for, and so forth.
That’s precisely why estate planning exists – to give us and our loved ones peace of mind. Below I’ll list some of the major benefits of having an estate plan and why we should all have one.
What is an estate plan?
First things first – let’s start with a definition. Estate planning can be defined as the set of tasks and activities directed towards managing one’s estate in case of incapacitation or death.
The amount of detail an estate plan contains and the end goal intended are entirely up to the estate owner. It essentially specifies your wishes and who should act on them in your absence.
So how is that different from a will?
A will is actually one of the tools used for estate planning. Think of wills as mandatory (in significance; not legally required) components of your estate plan.
While they’re extremely useful on their own, wills are most useful when combined with other devices for planning your estate, such as trusts, beneficiary designation, durable financial power of attorney, and durable medical power of attorney.
Now that we know what an estate plan is, let’s explore some of the major benefits it provides.
Estate planning is for everybody
Gone are the days when estate planning was associated only with high net worth individuals. Nowadays, most of us have quite a lot of assets and rights, whether we realize it or not.
This holds especially true in today’s global world where we can freely move from one country to another and work and create a family there; we can invest in the stock market; or cryptocurrencies; or collectibles… the list goes on.
It protects your beneficiaries
As we’ve established, wills are a vital part of estate planning. Unless we make a conscious choice about which of our loved ones will inherit our assets, someone else (the state) will decide that for us based on applicable laws.
Of course, our will and overall estate plan must be in accordance with any applicable laws, but we still have enormous decision-making power in those matters – as long as we create a will first.
Choosing guardians for minors
People build a life with a loved one and raise children together. But nobody wants to think about what would happen to those children if, God forbid, something were to happen to both parents.
Yes, in most, if not all, countries there’s a legal system, and it should, in theory at least, be directed toward preserving the wellbeing of minors.
But do we really want to leave this part of our lives to chance and to strangers? Estate planning provides people with a reliable way to appoint guardians for minors, putting their minds at ease on this tremendously important topic.
Durable power of attorney
Estate plans provide us with a way to designate a durable financial or medical power of attorney.
What that translates to is making arrangements for our end-of-life healthcare (literally making the decision about whether someone should pull the plug or not) or how our financial assets should be handled (for example, whether we’d like them to continue to be directed towards a specific goal after we can’t do that ourselves).
Estate plans provide us with a way to not only specify how our assets are distributed but also ensure someone is there to safeguard our wishes.
Among other important aspects, being explicit about how and when your assets are used when you’re no longer here could save your loved ones and heirs from a lot of unnecessary taxation.
There’s no one answer as to exactly how much could be saved from taxation, as it depends on the country and legislative specifics, but it’s yet another significant benefit to consider.
Do I need one?
There are many more benefits to having an estate plan, but the ones we’ve explored in this article are more than enough to answer this question. It goes without saying, but still – yes, absolutely; everybody could benefit from having an estate plan.
The more precisely and holistically we approach this important task, the more beneficial the outcome will be for us and our loved ones. Nobody wants to think of their own death or incapacitation, but the reality is – those things happen.
And if we have at our disposal such powerful tools for putting our minds at ease, it only makes sense to use them.
We’re here to help
We at DGLegacy are committed to providing peace of mind for our members and their loved ones through asset and password protection and digital inheritance.
As a natural next step in developing our product, we’ll be launching a digital will service that will help us reach and assist even more people in the struggle to ensure their loved ones are protected.