Although it was long predicted, the country is currently in the middle of the biggest transfer of assets in current history. The Federal Reserve reports that at the end of 2021’s first quarter, people in the United States who are 70 years of age and older had net worths of approximately $35 trillion.
The question of whether people in the United States will prepare to transfer assets depends on the extent of funds that pass on to attorneys, courts of love, and needy loved ones.
When someone you love passes away, assets are ideally passed to people and organizations chosen by the deceased individual. Many people are not adequately prepared to pass on assets, though. One study reveals that approximately 46% of Americans own wills, which are vital estate planning documents. Estate planning helps a person appoint who will take care of loved ones and determine how assets will be assigned after you pass away. While some people make the mistake of thinking that only the wealthiest individuals need estate plans, everyone including people of modest means need estate plans to achieve their estate planning goals.
What Makes Estate Planning Important in Wealth Transfer Situations
Everyone should appreciate how estate planning functions as well as how it impacts individuals. Besides trusts and wills, other estate planning documents exist that guard your financial stability. Powers of attorney addressing financial or medical issues refer to legal documents that let a person select a person who will make decisions for you if you are not able to do so. Without an updated plan, it can be challenging to either avoid or reduce the penalties that you end up facing.
How a Person Prepare His or Her Estate Plan
Online estate planning can help you appreciate what choices are necessary when completing each estate planning document and where to begin. Many plans include educational sections that instruct how to best protect our selections and assets. Appropriate estate planning includes more than just wills. To protect our loved ones as well as assets, you should create multiple estate planning documents.
One of the best strategies, to begin with, is a health care proxy, which is also referred to as a healthcare power of attorney document. These documents let you articulate what you want to have happen in case an emergency occurs and you cannot speak for yourself.
From choices about who makes decisions for you if you cannot do so to what measures you want to take to prolong your life, health care proxies are powerful documents that help to establish your wishes as well as save your loved one’s time and money. In situations where a person does not desire life-saving measures, health care proxies can help a family stop the hospital from taking all life-prolonging measures to save the patient’s life.