The main point of advance financial planning is to ensure the maximum amount of a person's assets passes on to the correct beneficiaries after death. If done correctly it can minimize tax liabilities and can also help to keep probate at a minimum. It can also plan for times when a person may lose their faculties or become incapacitated in some way.
It can help to ensure children have designated guardians and makes sure there is adequate life insurance. Life insurance is an important aspect of this type of planning as it can substantially ease the burden of loss. Adequate insurance will ensure there is sufficient cash to cover all outstanding debts and taxes, and can also meet burial costs.
Planning can also be related to business matters, helping to ensure the business can continue running after the death of a partner. When used in this way it often enables surviving partners to buy out the business from the remaining heirs. Or it can be used to leave the business to an operating heir while protecting other beneficiaries of the will.
It's something that not many individuals wish to face, but ensuring everyone is looked after can give considerable peace of mind. It is far better to ensure someone will be able to take care of you if you become incapacitated. It is nice to know someone will make decisions regarding your medical condition based on instructions you have left behind.
If you have children, it is essential to make sure they will be cared for by someone you know and trust in the event of an early death. It would be far less traumatic for them and everyone else to deal with their loss. Having a proper will in place also ensures that your estate will not be eaten up in taxes and other associated costs.
You can also decide who will be executor of your will, and this can help avoid arguments after you are gone. Probate can take a long time, and in the meantime assets can be frozen if a proper will has not been written. Probate is something that can be quite time-consuming and unnecessary when trying to deal with grief.
If you have been thinking about estate planning, then there is no time like the present to get it done. Your solicitor or lawyer will be able to advise you on the best way forward. You may be surprised at how much peace of mind you have afterwards.
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