Having uncomfortable conversations with your children is an inevitable part of parenting. While no one likes talking about death, estate planning can demonstrate your care and concern for your family’s well-being.
Estate planning means making a plan for your incapacitation or death. Although it isn’t always an easy topic to talk about, it is a practical way to take care of your family. Making important decisions while you are alive relieves your family of having to make difficult choices for you. By including your children in this discussion, you can make sure they understand your plan and wishes.
At Blado Kiger Bolan, P.S., we understand how important estate planning is to your family’s future. If you’re considering creating an estate plan, we can help you craft a plan that is right for your family.
Why Is Estate Planning Important?
Estate planning is a process that helps individuals plan for the transfer of their assets and wealth upon death. It also means addressing your values and preferences about life-extending care, burial, and other difficult decisions. Educating your kids about estate planning and involving them in the process helps them better understand your family’s financial situation and their role in the future. When you discuss your plans with your family, they will likely ask, Why is estate planning important? Below we explain four reasons why estate planning benefits you and your family.
Prepare Your Family for Your Death or Incapacity
Consider the stress that surrounds a loved one’s death or incapacitation. Having an estate plan lets your family focus on coping with your death or incapacitation rather than worrying about legal and financial details. You should communicate details of your plan, like where you keep your documents and who to contact, such as an accountant or attorney. Explain your wishes for life-extending care so that your family can be prepared for that moment. It’s also essential to communicate with the child or loved one who you have chosen to act as your executor. Explain the responsibilities that the position carries and ensure they feel comfortable executing your will and distributing your estate. Organizing your estate and informing your children of the details can provide a sense of security and comfort for your family during a difficult time.
Make Plans for Your Assets
When creating an estate plan, you must come up with a strategy to manage your assets and ensure they are passed on efficiently and beneficially. Estate planning allows you to pass on your assets in a manner that aligns with your values and goals.
If you pass away without a will, your family must divide your estate according to Washington law. In most cases, your spouse and children will share your estate. When you execute a will, you specify the assets your named beneficiaries receive. For example, you can choose to leave your business to your child who is involved in the business, split your assets between your children, or leave a gift to charity.
Another tool for controlling how your assets are distributed is a trust. With a trust, you place your property under the ownership of a trustee, who will distribute the trust property to your beneficiaries. While assets distributed by provisions in a will must go through probate, trust assets pass outside of probate. Probate is a court-supervised process that can be time-consuming and costly, especially if family members get into disputes over property or money.
Talking to your children about your plans for your assets helps them understand the “why” behind your decisions. Answering these questions now will help prevent hurt feelings or fighting after your death.
Minimize Unnecessary Taxes and Expenses
Estate planning can help minimize taxes and other expenses, which can help preserve the value of the estate for future generations. Explaining your approach to estate planning teaches your child about the associated taxes and expenses. When it comes to taxes, certain assets are treated differently. For example, assets held in a trust may be subject to different tax rules than assets distributed by a will. Similarly, assets in a retirement account, such as a 401(k) or IRA, may be subject to different tax rules than assets in a taxable brokerage account.
Additionally, real estate, stocks, and bonds may be subject to different tax rules depending on how they are held and when they are sold. For example, inherited assets may be subject to estate taxes. In contrast, assets gifted during a person’s lifetime may be subject to gift taxes. Washington state does not have a gift tax, but there is an estate tax. Ensuring your children understand the tax consequences of managing your estate will teach them how to better manage their own finances in the future.
Teach Your Children About Important Values
Involving your children in your estate planning process can teach them many valuable lessons. It can teach them the importance of financial planning and the need to think about their future. It can also teach them the value of family and the importance of ensuring their loved ones are taken care of.
Furthermore, by including your children in the estate planning process and discussing your plans with them, you can help them gain a better understanding of your values and priorities. You can help them make more informed decisions about their own lives and create a sense of continuity and stability within the family.
Why Choose a Trusted Planning Attorney?
When you bring up your estate plan with your family, they may ask if you tried online will-making tools. While their intentions might be good, estate planning templates usually have more problems than they’re worth. Only an planning attorney has the legal knowledge and experience required to provide advice and solutions tailored to your needs and goals. It is important for everyone, regardless of their wealth, to have an estate plan in place. The attorneys at Blado Kiger Bolan, P.S., can help you navigate the legal complexities of estate planning, anticipate and solve potential problems, and ensure that your estate plan is legally sound, compliant with state laws, and reflects your wishes. Contact us today so that we can help you get started on planning for your family’s future.