Question

Conduct an interview with an Estate Planning Attorney utilizing the internet, friend, relative, or personal connection. Ask them the following:

* Note: Please do not only define the terminology. I need thorough explanations of the question accompanied by the interviewee's opinion and advice of the content. 2 paragraphs minimum.

There are a series of 6 questions that I will post in 6 separate post questions.

Question #1 - What is the importance of estate planning in today's world?

Answer 1

There are mainly 4 reasons why Estate Planning is so important. They are :

1. An Estate Plan Protects Beneficiaries

If estate planning was once considered something that only high net worth individuals needed, that’s changed. Nowadays many middle-class families need to plan for when something happens to a family’s breadwinner (or breadwinners).

That’s because the main component of estate planning is designating heirs for your assets, whether it’s a summer house or a stock portfolio. Without an estate plan, the courts will often decide who gets your assets, a process that can take years, rack up fees, and get ugly. After all, a court doesn’t know which sibling has been responsible and which one shouldn’t have free access to cash. Nor will the courts automatically rule that the surviving spouse gets everything.

2. An Estate Plan Protects Young Children

Nobody thinks of dying young, but if someone is a parent of small children, he/shee needs to prepare for the unthinkable. This is where the will portion of an estate plan comes in.

To ensure that your children are cared for in a manner of which you approve, you’ll want to name their guardians in the event that both parents die before the kids turn 18. Without a will that names these guardians, the courts will step in to decide who will raise your children.

3. An Estate Plan Spares Heirs a Big Tax Bite

Estate planning is all about protecting your loved ones, which means in part giving them protection from the Internal Revenue Service (IRS). Essential to estate planning is transferring assets to heirs with an eye toward creating the smallest possible tax burden for them.

Even just a bit of estate planning can enable couples to reduce much or even all of their federal and state estate taxes and state inheritance taxes. There are also ways to decrease the income tax beneficiaries might have to pay. Without a plan, the amount that your heirs will owe Uncle Sam could be quite a lot.

4. An Estate Plan Eliminates Family Messes

Stopping fights before they start is yet another reason why an estate plan is necessary. This will enable you to choose who controls your finances and assets if you become mentally incapacitated or after you die and will go a long way toward quelling any family strife and ensuring that your assets are handled in the way that you intended.

All the best

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