Why Is Having an Estate Plan Important?

Estate planning is important for a number of reasons.
For instance the regulations about wills and estates where you live can mean that if you pass away without a valid will, your family will not be entitled to receive the benefit of your estate.
It may pass to the government if there is nothing specified in your will.
It is therefore important to look carefully at the structure of your estate to ensure that it creates the maximum benefit for your beneficiaries.
Estate planning can be important from the perspective of taxation law.
In many jurisdictions around the world, there are implications for both capital gains tax and income tax if the estate is not correctly planned.
Not obtaining adequate professional advice about your estate can mean that your family is unnecessarily exposed to taxes which could be avoided if a proper estate plan was in place.
Complex considerations in relation to the claiming of dividend imputation credits can also require the creation of testamentry trusts.
Another often overlooked part of the estate planning procedure is the period prior to death which can involve incapacity and therefore the need for an enduring power of attorney, enduring guardianship, living will or advance health directive.
These legal instruments can assist with arranging one's affairs where there is a prolonged period of mental incapacity requiring palative care.
Ensuring that your wishes are followed in relation to a period of mental incapacity can ensure that the end of your life is lived with dignity and in accordance with the wishes that you have previously expressed.
In an increasingly global world, people often own assets in more than one jurisdiction.
The reason that this can be an issue in estate planning is that it can result in an extremely complicated, expensive and time consuming process of estate administration if the executors of the estate are required to conduct a search for property which extends internationally.
In some jurisdictions of the world there can also be issues of entitlement to recover property if the executor is not located in the jurisdiction where the assets are and this can mean that the persons estate is consumed by the foreign jurisdiction rather than the jurisdiction in which they intended to leave their estate.
There are also some jurisdictions of the world where taxation laws mean that when an asset passes to a foreign beneficiary it will be exposed to additional taxes.
For all of these reasons, it is important to obtain advice from a professional in the area that is qualified to advise in the location where you live in relation to wills and estates matters.