An estate plan is not only for the rich.
It is frustrating to note that despite the importance of having a timely and up-to-date estate plan, about 120 million Americans do not have one. So, while 95% of the population wants their property to be transferred to the person they choose, only 35% have a will while 21% have a trust.
By planning your estate, you can be sure that your assets will go to the right people after your death. A well-crafted estate plan can help you specify who your beneficiaries are and what each of them will get. It will also ensure that the transfer of your assets will have the least possible tax consequences, and that the estate will have enough liquidity to meet its obligations.
On the other hand, dying inestate or without leaving a will can create unnecessary confusion among those whom you left behind. It can also be an extremely expensive and time-consuming process.
Despite the importance of estate planning, many Americans do not make it a priority due to the following reasons:
• 18% believe that it is not necessary
• 16% feel that it is too complicated and they would rather deal with it later
• 14% feel that the process is too expensive
• 13% believe that their spouse and children will automatically inherit all of their assets
• 9% do not want to think about the possibility of death or being incapacitated
• 7% do not have any idea what estate planning is all about
• 6% feel that it is too time consuming
Another common misconception is that estate planning is only for the rich. In fact, studies show that 17% of US adults claim that they do not have enough assets to warrant an estate plan. If you are among the people who believe this to be true, you need to know that even middle-income earners will benefit from having a will since this can help ensure that your future healthcare decisions will be followed in the event that you become incapacitated, and that your financial goals will be met even after your death.
In addition, business owners should likewise draft a succession plan to ensure a smooth transition following their death. Whether the business owner plans to transfer ownership or management of the business to his heirs, or sell his company to a third party following his retirement or death, he should consider drafting a succession plan to make sure that everything will go according to his wishes.