Freddie Mercury sang ‘Who wants to live forever’ and, true to his lyrics, he died young. Unfortunately, most of us don’t like to think about death and dying when we are still in the prime of life.
If you have dependents and assets, proper estate planning for the management of these after you’ve passed on, is essential. Andrew Auld, Financial Planning Consultants at Alexander Forbes explains more about estate planning.
1.What is estate planning?
Estate planning is distribution of your assets at your death and helps to avoid potential liabilities and problems. It is a term encompassing a broad range of matters: the will, a living will, estate duty, capital gains tax, trusts for minors, maintenance or accrual claims, provision for dependents, distributing benefits after a second marriage, final expenses and more.
2. When should you plan your estate?
Regrettably, estate planning is often postponed until later in life when it should be done the moment you acquire any assets. This would start with the setting up of your first will and continue to develop as your circumstances change with marriage and children. It is advisable to consult with a professional experienced in estate planning to consider the impact of your wishes on those who inherit, especially your relatives.
3. Why is estate planning necessary?
Planning ahead empowers those who take care of your affairs after your death to carry out your wishes accurately. There is also planning required concerning taxes. Smart planning can help reduce the impact of taxes, as well as ensure that there is adequate cash available to settle taxes and other costs at death.
4. What is the cost of estate planning?
There is often no specific fee charged for this service, as it forms part of the holistic financial planning approach rendered by the financial services industry. Those with large estates who have more complex needs will require more technical competencies. Good advice comes at a cost and fees are in line with those charged by professionals such as attorneys, accountants, trust companies and financial planning businesses. The costs of improper estate planning could be immeasurable and result in broken family relationships, financial hardship, excessive taxes, family business and partnership impacts, to name a few.
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