Nobody wants to consider the worst-case scenario, especially when you’ve just started your family and your children are young. Despite our best wishes, young children and minor dependents are particularly at risk when it comes to the decisions made in the event of a parent or caregiver’s death. You spend so much time considering the many facets of your finances, large purchases like homes and cars and debt financing, but very few people think about the estate implications if something were to happen to them.
Making the right preparations for your family
The things you worked so hard for should be protected for your loved ones. Most people think an estate plan is merely a decision of who gets what after your death, but there are more implications related to tax collection and debt management than you might think. By making these considerations now, you can spare your family potentially significant financial burdens and delayed distribution of assets to your loved ones. Here are some of the reasons it is better to begin an estate plan now:
- You can designate heirs: These heirs can receive specific assets.
- You can avoid probate: The delays caused by the probate process can delay the distribution of necessary assets to your family.
- You can choose guardians: You must have these conversations early to determine who you will select as your children’s guardians, as well as the instructions for how those guardians should raise them.
- You can create trusts: By creating trusts for your children, you can reduce your estate size and the many tax implications that come from such a structure. In Minnesota, the estate tax exemption is up to $3 million. If your estate is above that value, reducing its size could mean that your family might keep more of your money.
Don’t wait to protect your family’s interests
You don’t want to wait for the worst to happen to draft an estate plan. Contact an attorney specializing in estate planning to guide you through the best options for your family.