It may seem counterintuitive, but planning for death can help you make the most out of life. A recent piece in the Huffington Post discussed the importance of estate plans, noting that these legal tools are important for everyone, regardless of age.
One of the reasons that this process transcends age is the fact that putting together an estate plan can be a beneficial process for the creator. Although the estate plan itself can provide future financial security, there are two specific benefits that result from the process: taking an account of your assets and taking advantage of potential tax savings.
Tip #1: Taking an account of assets can result in future financial security
One of the first steps when putting together an estate plan is putting everything in order. Getting information about your various accounts (savings, retirement, stocks), investments, properties and business interests as well as insurance policies.
Having an idea of what your estate is composed of can help you make adjustments to make the most out of what you have. Maybe a review of your retirement accounts makes you realize you should invest a bit more into your sunset years or you realize the beneficiary designations on your insurance policies need updating.
Tip #2: Taking advantage of potential tax savings
Estate plans make use of various legal tools. These tools can include a will, advanced health care directives and powers of attorney documents. Another important legal tool is trusts.
Trusts are documents that can be tailored to fit your needs. Essentially, property is placed into a trust and managed by a trustee. Depending on how it is structured, the process can reduce the amount of taxes that need to be paid when assets are transferred.