To many people, the term “estate planning” evokes pictures of mansions, yachts, and fancy jewelry. While it’s true that estate planning is essential for wealthy individuals, it’s just as important for the rest of us. Whether you’re living high off the hog or guarding your piggy bank, estate planning isn’t a luxury – it’s part of being a good steward. This blog will look at the reasons why it’s important for everyone to plan for the future.
Protect Your Family
Creating a comprehensive, well thought out Estate Plan protects your family from cold court rooms, and spares your family from the heartache of making hard life changing decisions. These documents will allow you to ensure your minor children are in a loving home or give your family guidelines on how you would like medical decisions made in the event you cannot. These documents allow you to choose who takes care of the children, the money, the house, the medical decisions. You can choose different people for each area where they serve best. We find when families have been given specific guidelines on how to move forward it reduces fighting and saves the family money.
Protect Your Estate
Whether you are protecting your million-dollar estate or just the home where you raised your kids, you want to ensure that it is protected from overtaxing, the occasional greedy in-law, and beneficiaries who aren’t capable of or are unwilling to wisely manage their inheritance.
Currently, the Federal Estate Tax only applies to estates valued at $5,490,000 and over. This means that roughly 99.8% of estates will owe no estate tax at all. Although the Federal Estate Tax doesn’t apply to smaller estates, the gift tax might so it is important to meet with an Estate Planning attorney who can tell you whether it’s better to gift property or money while you’re still alive or to wait until after you’re gone.
If you find yourself questioning whether your children or other beneficiaries will be able to make sound financial decisions with their inheritance, establishing a Spendthrift Trust might be exactly what you need. A Spendthrift Trust allows you to dole out money to your beneficiaries over time instead of all at once. It’ll protect them and your estate from creditors, advantageous spouses, and themselves. There are several other types of trusts that allow you to provide for your loved ones’ needs, including Special Needs Trusts, Educational Trusts, and Minor’s Trusts.
It’s important to note, whether you have $500 in the bank or $500,000,000, having an Estate Plan is the smart responsible thing to do because not having one means leaving your family and estate vulnerable.