The Importance of Having an Estate Plan

A WillYou always hear people say that you will not be able to bring with you whatever wealth you have amassed while you were still living.  That is very true, but have you ever thought about what will happen to them when you do pass away?  There are a lot of tales of family feuds that started because the head of the family was not able to leave a will before passing.  And God knows how many secret bank accounts and properties were left unattended only because the owner was not able to make arrangements for them to be passed on to the rightful heirs.  Imagine what will happen to your family in your passing if you were not able to plan for the transfer of all your properties to their name.

This is the reason why more and more individuals are realizing the importance of having an estate plan.  No matter how modest or massive your wealth is, you need to plan for your estate so that you will have full control of how your estate will be divided among your family and any organizations that you contribute to.

Aside from that, there are many reasons why you should consider meeting with an estate planning attorney:

  • To avoid probate. Most people put together an estate plan in order to avoid a probate.  A probate will require hours of court appearance with your lawyer and tons of paperwork to prove the validity of your will.  If you didn’t go through estate planning with your attorney and did not write up a will the court will assign a representative to decide what happens to the estate that you left.  Though you may not be around to witness all that, you should consider estate planning so that you will have peace of mind that your properties are divided as you wish and equally among the people that you love.
  • To reduce estate tax. There are several estate plan techniques available to both married people and individuals to help reduce inheritance tax.  Planning for your estate removes this burden and allows your family to receive more of the estate that you have left behind.
  • To protect your beneficiaries. Probably the main reason why you should think about estate planning is to be able to ensure that you protect the interests of your beneficiaries.  An estate plan will benefit a minor beneficiary in such a way that you can assign a guardian or trustee to take care of his/her portion of your estate until he/she comes of age.  If you happen to have an adult beneficiary who you fear will not be able to handle the money wisely or has a spouse who might squander the money away or take everything after a divorce, an estate plan can be constructed in a way that you can prevent these things from happening.
  • To prevent feuds. An estate plan will enable you to assign someone who can be in charge of managing your estate when you become mentally incapacitated.  It can also dictate which part of the estate goes to which beneficiary and how much each will get.  Having this in place before your death will prevent the big mess of family fighting over what they think is rightfully theirs.

Effective Ways to Save Money for Your Retirement

It’s something that you have always wanted to do but seem never to get around to doing. Saving for your retirement are one of the best things that you do for you and your spouse as well as your family. Without any income coming in and expenses continuously growing, you wouldn’t want to be a burden to your family who have needs as well. If you have grand plans of things to do during your retirement well, you might as well start saving a small amount as early as now to make sure that you realize that dream.

Here are a few ways of effectively setting aside money for your retirement years. There are many investment and saving options available for you and it’s important that you assess each one and pick those that fit your budget as well as your comfort level when it comes to taking risks.

The good old-fashioned savings

This is probably the most common option that people usually make when they want to put away money for retirement because it is very safe. However, when you want to make your money grow, this may not be the best option because a savings account do not earn that much interest compared to other investment vehicles.

Aside from setting aside a small amount of your paycheck every month, try to put aside any bonus or raise that you might receive throughout the years that you are working instead of blowing it all out for a vacation for the family. Spend some for leisure because you have to reward yourself from time to time, but make sure that you put something away for the rainy day that may come unexpectedly. Try to create a budget for your family and commit to sticking to that budget, the less you spend, the more money you save for emergencies and for your retirement.

Boost your 401k

Most companies have a 401k set up to replace pension plans and a lifetime health insurance. A 401k plan is a type of retirement savings plan that your employer sponsors. With a 401k, a portion of your salary is taken out before tax is applied to it. The beauty of a 401k is that you can control what happens to your money. You can also opt to put in more of your paycheck if you want to save more.

Compute for what you actually need to spend for expenses by creating a budget and if you have money left over, boost your 401k by adding an amount that you are comfortable with. This way you ensure that the money you have left over after paying for expenses is put away in savings for your retirement instead of being used for an unnecessary expense.

Having an IRA

Look into having an Individual Retirement Account to save money for your golden years. This is a type of retirement plan that has tax advantages which makes it very attractive for retirement savings. IRA funds can be withdrawn and the tax applicable to these depends on your income. This will benefit you during retirement as taxes applied to withdrawals will be lower because of your lower income.