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Why Inheritance Planning Is Important

April 10, 2012 | Comments: 0 | Views: 137

If someone asked you how much money you had, where do your thoughts immediately go? To your bank accounts? The same thing often happens when people begin making their wills - they forget about the value that is in their home and assets. To prevent problems arising after you have passed on, it is important to ensure that you have employed the proper inheritance planning services long before it becomes an issue.

Whilst it is always best to get the advice of a financial advisor in any instances where money is involved - yes, even inheritance planning - there are a number of things that you can look at yourself before you begin sorting it all out. Start by writing out a list of your assets on a piece of paper. Begin with your savings, your home and perhaps any vehicles that you own (such as cars and boats), but do not forget your other possessions.

As a part of your inheritance planning process, it is a good idea to go through each room of your house, piece of paper in hand, to assess the possessions that you have in there. You will be surprised at what items can actually be worth a substantial amount of money (such as a DVD collection). Figure out whether you want to leave specific items to specific people (such as your teaspoon collection to your daughter and your records to your son).

It is now time to visit a financial advisor to construct a will as the final (and legally binding) part of your inheritance planning. Whilst it can be very tempting to construct this document yourself, seeking assistance from someone who knows what they're doing will ensure that you get the process right the first time around. Even though this may cost you a little bit extra, you will agree that it is money will spent when it comes to protecting your final wishes.

Inheritance planning isn't just about who gets what after you pass on, however - during this process, you can take active steps towards avoiding your family and friends having to pay inheritance tax. For many people, they don't even realize that their inheritance gets taxed, nor that there are ways to get around this. For example, some people find that dispersing some of their money between family members before they pass on is actually a great way of avoiding tax.

As you can see, there are a number of reasons why inheritance planning is an important process for everyone to tackle, and that it is always recommended to get the help of a financial advisor to ensure your money will be taken care of properly once you pass on. If you want to avoid taxing your loved ones and disputes over your possessions, look into inheritance planning today.

In this article we have discussed why inheritance planning is important before taking any decisions.

Source: EzineArticles
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