Estate Planning – Why It’s Never Too Early To Think About Your Future
— Johnson Fistel, LLP (@JF_LLP) July 10, 2021
- Why you need an Estate Plan
You have worked hard to provide for your family and loved ones, and they are depending on you for their protection and security. But as this past year has shown, we live in uncertain and challenging times, and even the best intentions might not be enough.
It’s not always comfortable to openly discuss your personal finances, your retirement goals, or think about what might happen to your wealth if you die, so many of us put off estate planning and having those difficult conversations…sometimes until it’s too late.
If there’s nothing in place when you die, the state will determine how your assets are to be distributed and who will take care of your children, and their decision making process is not the same as yours. Their process is also slow, expensive and completely public.
And even if you have a will or trust in place, those documents may be outdated and in need of a slight tune up or major overhaul. You may want to include support for a charitable cause that’s close to your heart. If you have children from a previous relationship, you will also need to consider what would happen to them if anything happens to you.
Here are some important things to consider when it comes to planning for your estate and future:
- Why you probably need more than a Will
A Will is a good starting point if you don’t have anything else in place. Your Will essentially designates where you want your assets to go upon your death. In certain cases, a Will might be all someone really needs. But in most situations, an estate needs more. This is especially true for estates with significant assets, highly appreciated property, dependents, and potential liability or estate tax exposure.
- What’s a Trust?
A Trust can save your property from the time, expense and exposure of the probate process. It can also ensure that all of your children/dependents are provided for if anything happens to you, and in some cases it can help reduce your estate’s risk, liability and tax exposure. A trust can also integrate philanthropic giving in a tax efficient manner. Trusts can be simple and straightforward, or more complex depending upon the needs and goals of the trust’s settlors and beneficiaries.
- What is Asset Protection?
If you have accumulated significant assets and/or you are engaged in a high-risk profession, your estate may be vulnerable to frivolous lawsuits. An asset protection plan can help insulate your assets from scammers and litigants who are intent upon separating you from your hard earned wealth.
- Do I need to consider estate tax?
Many high net worth estates contain highly appreciated property (including private business interests, securities and real estate). If your estate holds substantial assets, there is a possibility it could be subject to substantial gift/estate taxes. A tax mitigation strategy can reduce or avoid tax exposure when highly appreciated assets are passed down to future generations.
- What about insurance?
Everyone can benefit from insurance, particularly when the unexpected occurs. But when large, complex estates are added to the equation, insurance coverage is an absolute necessity. Many large estates may not have a great deal of liquidity, and cash can be required to help divide assets, cover taxes and pay other succession costs. Life insurance can provide the funds needed to help your dependents cover these expenses without having to liquidate closely held companies, family heirlooms or sentimental assets.
- Why you should start making plans today
Regardless of the size or complexity of your affairs and estate, it is essential that you work with a trusted and experienced attorney who can help protect your wealth from risk and uncertainty, and provide you with the peace of mind that your assets and family are safe and secure.
The attorneys in the Johnson Fistel Estate Planning Group can provide a comfortable, safe and confidential space to craft a comprehensive plan that will help protect your family and achieve your succession and philanthropic goals. We can also review your existing estate plan and make recommendations based on new regulations and pending legislation.