Estate Planning is critical, and it isn’t just for the rich. A good estate plan is designed to allow you to transfer your assets to beneficiaries in accordance with your desires, and with minimum tax liability.
First and foremost, everyone has an estate, no matter how big or small it is. For some, this may mean the money in their pocket and the clothes on their back, and for others it could be several properties, business ventures, and a complex portfolio of different investments. In either case, whatever you leave behind when you pass away is considered your “estate”.
Do I need estate planning? Regardless of the size of your estate, it will have to go to someone, and there will also have to be someone to ensure that your estate is distributed. In most cases, your estate will flow to your spouse, children, or a direct family member. If you don’t have an estate plan in place naming who gets what, you may be leaving behind a legal headache for your surviving family. That is what estate planning is all about – determining how your property and belongings will be distributed after you pass away. While it isn’t mandatory for you to have an estate plan, you are setting your would-be heirs up for a potentially complex legal battle without clear instructions on how to handle your estate.
Is a will enough? Even if you have a will, your estate will still have to go through the legal process of probate. While a will tells the probate court what you would like to have happen with your estate, it is still up to the courts to approve it and transfer the assets to your heirs, a public and time-consuming process. If you have a more complex estate, there are several other tools that will allow you to avoid the probate process altogether, and minimize estate taxes. These tools include revocable living trusts, limited liability corporations, irrevocable trusts, charitable trusts, family limited partnerships, as well as many others.
Where do I start? The best place to start is by speaking with a qualified legal or financial professional to help you determine the complexity of your estate, and what options may be available. At Wealth Planning Network, we offer complimentary consultations to help clients evaluate their retirement and estate plans, and determine which strategies would best address their individual estate concerns. If you would like more information, please contact us today!