Elephants! Such majestic creatures, don’t you agree? They have been in the news and our imaginations for different reasons. As part of temple festival celebrations they evoke such awe in us. The story of the pregnant elephant who got fed pineapples laced with firecrackers wrung out our deepest empathy. This article is about the elephant but not the elephant you are imagining right now
It is about the elephant in the room that nobody talks about.
It is about Estate Planning.
Are you already rolling your eyes? Are you choosing to ignore your own mortality? You are probably thinking that there is so much time left so why bother reading this now. You are definitely right, in fact you are more than right. Now that the world itself has slowed down it is the perfect time to get into all matters that you have been putting off for later. Isn’t this an opportunity for us to assess our preparedness? Maybe this pandemic will provide that breather you were always looking for and you may finally have the time to sit down and think about how to sort your estate and its future management. It could also be that your work has now increased and have less time. That would be more of a reason to start estate planning as you are not sure how busy you will get from here on. So might as well get things started before it slips your mind.
We live in uncertain times where things go topsy-turvy just like that. Can we really afford to not think of how our loved ones will cope with our loss? Not just OUR loss in their lives but then also to deal with all matters relating to estate. Wouldn’t it be better to have all affairs sorted out ahead of time so that when the time comes for our loved ones to push on forward without us, they will be equipped and better prepared?
So what really is estate planning?
Estate planning involves all preparations for the preservation, management and distribution of all the assets of an individual after his/her death. It also takes into account what would need to be done in event of incapacitation of the individual.
In a nutshell, estate planning will ensure that you have control over who receives what and when with the least amount of taxes, litigation and other financial outflows.
Of course, the actual work involved is more complex than just deciding what you want.
However, before we delve into that let us look into why you need estate planning.
So why really estate planning?
Let’s face it losing loved ones is very hard and the loss is irreparable. The prospect of facing life and future without them by our sides is often daunting, especially if they were the prime provider. The family will need to learn everything from scratch including handling finances and expenses. Estate planning will save your family from this additional financial and legal grief. There will be clarity with regards to your assets and will help avoid any confusion, disagreement and even bitterness among family members. Isn’t the peace of your family worth your valuable time now?
With estate planning you can provide for your loved ones by ensuring that your physical, financial and online assets are passed on to them. You can even make arrangements to cater to the special and specific needs of any of your loved ones.
It can help you and your family be prepared for various contingencies by making suitable provisions for all events.
Also importantly, it can help your loved ones reduce their tax burden on account of inheritance.
Aren’t all these reasons enough to consider estate planning seriously?
How can you go about planning your estate?
You can go about this in two ways- write a will or form a trust. You can even write a will with instructions on forming a trust. A will is a legal document providing instructions on how to handle the individual’s estate- this includes all assets and instructions on custody and guardianship of minor children. The will, will have to be authenticated by a legal process called as probate. Not all assets need to go through the probate. If a probate takes over how assets are distributed then it could be a time consuming affair.
Writing a will is the most common form of estate planning among individuals. It is ideal when there is quite a bit of clarity regarding assets and the beneficiaries. But as the assets increase in number and distribution going through a probate process may mean spending years in the legal proceedings before the assets get actually passed on to the beneficiaries.
For this reason many families and professionals- especially those in business prefer to form a living trust. A trust brings all your assets in one plan with maximum privacy while avoiding the long-drawn process of probate. It can be changed by you at any time and is valid in all states.
A trust may have more initial costs than a will but in the long run it has more benefits considering the time that will be saved from probate processes. The trust can be tailor-made to suit your values and requirements and can ensure that your personal assets will remain in family without the debtors coming after them. The trustee you choose will oversee the management of you trust ensuring your assets reach the right person at the right time.
When can you plan your estate?
Now, obviously. There is no time like present so why put away till tomorrow what you can do today. Estate planning doesn’t have to be fancy or expensive. It can start with something as simple as a will and evolve with your growth. A well planned estate will result in peace of mind for you and your family. Why delay then?
Planning your estate is about you being organized as an individual and responsible as a provider and is definitely not about feeling morbid. It is about getting your affairs in order and ensuring that they remain in order even after you. So go on now, talk about the elephant in the room. Just like the majestic temple elephants need your admiration, the pregnant elephant needs your sympathy- this elephant in the room needs your attention and time.
Client Associates, Bangalore
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