Financial Stability

Who Needs Estate Planning?

October 16, 2015
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Why estate planning is so important for all.
estate-planning-337-177Simply stated, estate planning is creating a plan to determine how to distribute your property during your life and at your death. It is the process of developing and implementing a master plan that facilitates the distribution of your property after your death and according to your goals and objectives. Preparing a solid estate plan can ensure financial stability and peace of mind for a surviving spouse, preserve assets for children and grandchildren, minimize taxes and expenses and ensure your wishes are carried out.

You have an estate. It doesn’t matter how limited (or unlimited) your means may be, and it doesn’t matter if you own a home or homes.

Rich or poor, when you die, you leave behind an estate. For some, this can mean real property, cash, an investment portfolio and more. For others, it could be as straightforward as the $10 bill in their wallet and the clothes on their back. Either way, what you leave behind when you die is considered to be your “estate.”

“But, I don’t need estate planning … do I?” Let’s think about that. If the estate is small, should you still plan? Well, even if you’re just leaving behind the $10 bill in your wallet, who will inherit it? Do you have a spouse? Children? Is it theirs? Should it go to just one of them, or be split between them? If you don’t decide, you could potentially be leaving behind a legacy of legal headaches to your survivors. This, quite simply, is what estate planning is all about – deciding how what you have now (money and assets) will be distributed after your lifetime.

Do you HAVE to create an estate plan? While it is absolutely possible to die without planning your estate, I wouldn’t say that it is advisable. If you don’t leave behind an estate plan, your family could face major legal issues and (possibly) bitter disputes. So in our opinion, everyone should do some form of estate planning. Your estate plan could include wills and trusts, life insurance, disability insurance, a living will, a pre- or post-nuptial agreement, long-term care insurance, power of attorney and more.

Why not just a will? Did you know that your heirs could encounter legal hassles … even if you have a will? Basically, a will tells the world what you’d like to have happen, but proper estate planning is what provides the tools to make those things happen. While your will may state who your beneficiaries are, those beneficiaries may still have to seek a court order to have assets transfer from your name to theirs, and in such a case, those assets won’t lawfully belong to them until the court procedure (known as probate) concludes. Estate planning can include items like properly prepared and funded trusts, which could help your heirs to avoid probate.

Proper estate planning may help to make sure that your loved ones are provided for or additionally, avoiding probate or reducing taxes. Estate planning can be as simple as implementing a will (the foundation of any estate plan) and purchasing life insurance or as complicated as executing trusts and exploring other sophisticated tax and estate planning techniques. Estate planning is extremely important if you are wealthy or have a smaller estate. In fact, estate planning is more important if you have a smaller estate because final expenses will have a greater impact on your overall estate and financial picture. Misusing even a single asset may cause your loved ones to suffer from lack of financial resources.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.