Estate planning is an agreement in which a person decides what will happen to their belongings after death. It is not only for wealthy individuals in Pennsylvania; just about anyone can use it. It offers more benefits like distributing assets, peace of mind, avoiding estate taxes and ensuring that the right survivors get the inheritance.
Estate plans save time and money
One of the core reasons for estate planning is to save your family time and money. If you die without a will or any other type of estate planning, your loved ones will have to go through the probate process. Probate is the legal process of distributing a person’s assets after death. It takes a lot of time, sometimes up to seven years, and comes at a great cost.
Estate planning can give you peace of mind
Knowing that your affairs are in order and that your loved ones will not suffer financial difficulties if something happens to you can be a great weight lifted off your shoulders. You won’t have to worry about who will take care of your minor children or how they will be able to use their inheritance because you will have already decided these things in your estate plan.
Estate planning can ensure that your assets go to the people you want them to
When you don’t have an estate plan, the state will decide how to distribute your assets after you die. Unfortunately, state distributions mean that your hard-earned money and possessions may not go to the people or causes you care about most. However, with proper estate planning, you can ensure that your belongings are in the right hands.
You can avoid paying hefty taxes with an estate plan in Pennsylvania
The tax rate for Pennsylvania inheritance tax is 4.5% for direct descendants like your children and grandchildren, 12% for siblings and 15% for other heirs. Federal estate taxes, on the other hand, are as high as 40% of the value of your estate. These tax rates mean that without a proper plan, the government can take more than 50% of your hard-earned money that you took years to accumulate.
Estate planning is essential to financial security for you and your family. If you don’t have an estate plan, now is the time to create one. If you have one, consider reviewing and updating it often to ensure that it still meets your needs and the needs of your loved ones.