Creating a solid estate plan is a worthy endeavor, no matter your life stage. Estate planning does more than allocate your assets after you pass. It allows you to establish your wishes for all your end-of-life decisions.
Your estate plan does not need to be static. You can make adjustments as your needs and wishes change. However, establishing a strategy early gives you and your heirs multiple advantages.
Protect your heirs
Drawing up an estate plan protects your heirs in multiple ways. If you have children and both parents pass away before they reach the age of 18, the courts decide where to place them unless you make your wishes known in legal documents. When you have a family business, estate planning allows you to protect it through succession planning.
Pennsylvania imposes an inheritance tax on most assets. Generally, your heirs will pay a tax that is a percentage of your estate. However, certain types of trusts may reduce the taxes they must pay. An estate plan also prevents your assets from entering probate, where the courts would determine how to distribute your estate.
Prepare for incapacitation and end-of-life processes
A comprehensive plan includes preparing for the possibility that you become incapacitated. You can establish your wishes for health care and insurance and appoint a power of attorney or health care proxy who makes your financial and medical decisions or implements your desires when you can’t.
Estate planning gives you control over what happens to you and your assets when you cannot manage the decisions or outcomes yourself. It is more comprehensive than a will and has advantages for both you and your heirs.