Estate planning in simple terms refers to the passing assets / investments down from one generation to another. You decide how much of your estate be it property(s), car(s), personal accolades, financial investments, etc. you want to pass on to whom and how, after your demise.
It is a dynamic process that needs to be reviewed at regular intervals to absorb any changes that might happen in our life or in the laws of the country.
Estate planning is the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life, in the event the person becomes incapacitated and after death. The planning includes the bequest of assets to heirs and may include minimizing gift, estate, generation skipping transfer, and taxes. Estate planning includes planning for incapacity as well as a process of reducing or eliminating uncertainties over the administration of a probate and maximizing the value of the estate by reducing taxes and other expenses. The ultimate goal of estate planning can only be determined by the specific goals of the estate owner and may be as simple or complex as the owner’s wishes and needs directs. Guardians are often designated for minor children and beneficiaries in incapacity.
Estate planning helps the beneficiary reduce tax outgo on account of inheritance
For instance, instead of passing on assets after demise, you may gift them to your loved ones while you are alive; because if left to the prevailing intestacy rules, there is a chance that a higher amount of tax would be applicable on your property and other assets.
Helps to prepare for contingencies
With systematic estate planning, you can even determine who will handle all your financial affairs, in case you were to become incapacitated tomor.
Estate planning can also help pass accolades bestowed on you to a specific individual
Say, you are defence personnel and wish to give your war medal, which has some sentimental value to your younger daughter who has interest in war history; this is possible through prudent estate planning. But in the absence of proper estate planning, it may or may not be granted to the person of your choice.
Can provide for, or address to a family member or a loved with special needs
Through an estate plan, besides leaving behind a corpus for an individual with special needs, one can further go on to designate a guardian for them.
Ensures that all assets are passed on to your loved ones
Estate planning ensures that all your assets physical, financial and online are inherited by the people to whom you want them to be transferred after your demise. The law might not take into account your personal relationships or preferences while distributing your assets if you die intestate.
Prevents financial and legal grief to your loved ones
In times when your family may be run down emotionally, financial and legal grief is the last thing you want them to undergo. With prudent estate planning long-term financial interest of your loved ones can be ensured, and legal rigmarole can be minimised.
Avoids complications, disagreement, bitterness and drift in the family
Your legal heirs may be inexperienced in managing the bequest. This can complicate relationships and lead to squabbling and bickering within the family. But drawing an estate plan prudently can help you manage these atrocities.