According to the study from Caring.com, estate planning trends this year kind of bounced back to where they were before the pandemic, for the first time. Right now, fewer than 3 out of 4 Americans have their wills ready, and only 32 percent of them do, which is down 6 percent compared to 2023. The thing is, those estate planning numbers had kept rising year after year, until this year.
In 2023, 35 percent of people surveyed thought you had to be wealthy for estate planning to actually be helpful. Then in 2024, that jumped to 40 percent. That’s 4 out of every 10 Americans who feel that way, and it’s up 21 percent over the last two years.
It might sound dull, but estate planning is one of those crucial actions a person can take for their family. It manages and distributes assets based on the decisions and wishes you set once you’re gone. And it’s far more than a will. It’s about safeguarding your legacy and also looking out for the people you care about.
Estate planning lawyer Lynard C. Hinojosa mentions that basically anyone can benefit from estate planning and that working with a lawyer helps you sidestep the usual traps that come with drafting a will or setting up a trust.
Here’s why estate planning matters so you can protect your legacy.
Protect your loved ones
Creating a sound estate plan is one of those tasks you take care of so your family does not face financial headaches or legal issues after you’re gone. Having a complete estate plan tends to help you dodge delays, especially if your estate has to go through the probate process.
By doing thorough estate planning, you can also appoint guardians for any minor children, which means their care is handed to people you trust. That decision can bring a lot of reassurance because if something should happen to you, your kids aren’t left to chance; they are looked after by loving and dependable individuals.
In addition, estate planning is where people learn how to reduce the allowed taxes and other expenses their estate could face, so that more of what you’ve built stays preserved for your beneficiaries.
Minimize estate taxes
Estate tax planning is in fact one of those areas where you can use a smart financial planning option to minimize how much your estate taxes end up being. You can take advantage of the annual gift tax exclusion. If you make gifts to your loved ones while you are still alive, you can reduce the total value of your estate so that value gets taxed later, after your demise.
Also, by setting up trusts, like irrevocable life insurance trusts or charitable remainder trusts, you can make it so your estate taxes are reduced.
There’s another approach too; you can maximize the benefits that married people often have. Any property that gets transferred to a spouse at death will usually qualify for an unlimited marital deduction, which basically means that the property might pass to the spouse tax-free. Depending on how your plan is set up, your estate plan can be useful for helping your estate pay less tax.
Avoid Probate Hassles
Probate can end up being a really lengthy and expensive legal process where the court basically watches how your assets get distributed after you pass away. In South Carolina, family members need to file probate within 30 days but at the same time, the state also says it has to be submitted within 10 years from the date of death.
If you miss that window, you might face problems, such as losing the ability to manage the estate and arrange the assets as the deceased person would have wanted.
And if your estate ends up going into probate, then your financial information can become public record. Without an estate plan, your assets could end up being visible to folks you would rather not have access to your financial details in the first place.
Ensure your wishes are honored
When you create a full estate plan, you kind of get to decide how your assets are going to be handed out, who should take care of your minor children, and what you want to happen medically if you become incapacitated.
By saying these wishes clearly, in wills, trusts, or advance directives, you’re basically giving your loved ones a kind of roadmap they can follow when the moment comes. This is not only to help prevent family disagreements but also to make sure your assets end up in the exact places you want them, even if it feels awkward at the time.
If you have no estate plan at all, it may just be working against you. It can bring about confusion, clashes, and outcomes that are unwanted and really not beneficial. Still, taking the time to prepare a well-considered estate plan can do a lot for your family’s peace of mind.
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