| The many people who don't have an estate plan must wonder what the big deal is and why such a plan is so important.
Well, besides making sure your assets get to the people you choose, estate planning can help minimize any income, gift or estate taxes. Without an estate plan, and specifically a will, the laws in your state will determine what happens to your possessions and, in specific cases, the courts will decide who gets custody of your children.
Translation: Without an estate plan, your assets can wind up in some serious legal limbo for years. And that sort of mess can put an unnecessary burden on your heirs and other family members who will be left to deal with sorting out your finances.
Estate planning is the best way to "protect your money and your legacy," according to certified financial planner Lazetta Rainey Braxton, co-founder and co-CEO of 2050 Wealth Partners.
Braxton says it's critical to have estate planning documents, including a will that dictates who will receive your assets upon death, and to keep your beneficiaries updated.
Meanwhile, although estate planning is one of the crucial elements of a comprehensive financial plan, it's somehow also the most overlooked component, with the majority of adults not having any form of estate planning in place.
To that point, nearly 66% of American adults still don't have a will, according to a recent study from Caring.com.
I understand that people don't want to talk about a will and other estate plans or what will happen to their loved ones after they're gone. While it's an understandably sensitive and difficult subject to broach, a lack of planning causes a lot of families to be caught off-guard if an unexpected tragedy occurs.
For more timely advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. To listen to the latest edition of the PF team's weekly Twitter Space, "This Week, Your Wallet," click here. |
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