Estate planning is a tool that enables you to decide how the things you own should be handled after death or incapacitation. An estate plan lets you determine what happens to your property, the well-being of your family, the guardianship of minor children, and how to minimize or eliminate taxes. It can also cover the extent of medical treatment you desire.
Estate planning allows you to select someone you trust to make decisions on your behalf. This enables your wishes to be carried out quickly and smoothly and helps you determine the degree to which probate can be avoided. Some of the more common assets addressed during the process include:
- Transfer of wealth
- Minimization of transfer taxes
- Asset protection
- Caring for minors and others
- Care of pets
- Healthcare directive
- Charitable giving
- Beneficiaries, executor, designee or trustee
- Your home and other real estate
- Automobiles, boats or other vehicles
- Investment accounts, bank accounts, 401(k) or IRA
- Intellectual assets
- Digital assets
- Businesses owned
- Financial windfalls
As part of our 3P Approach© to planning, we can help you create a master plan using a variety of asset protection strategies for the management and distribution of your property. This plan generally aims to give you more control over assets during your life, to provide care should you become disabled or incapacitated, and allows for the transfer of your wealth to whom you wish, when you want, and at the lowest possible cost.
A trusted financial advisor can help you determine the best course of action but generally topics to discuss include:
- Financial Power of Attorney – A financial power of attorney (POA) authorizes a trusted principal to act on your behalf, either effective immediately or based upon a future event like incapacitation.
- Healthcare Power of Attorney – A healthcare power of attorney authorizes a trusted designee to make decisions on your health care should you become mentally or physically unable to do so.
- Living Will/Advanced Directive – A living will can express your specific desires should you become critically injured, terminally ill or unable to express your wishes. It can spell out the types of life-prolonging medical treatment you want or do not want such as a “do not resuscitate” order.
- Will – A will helps take care of property that must go through probate. You can appoint someone you trust to act as executor and appoint a guardian or conservator to handle the care of minor children, including minor or adult children with disabilities.
- Living Trust – A living trust can help you distribute property, avoid probate and minimize estate taxes, especially if you have a large estate. One type to consider is a revocable living trust, where property is transferred to the trust. You control the property while living and you can revoke it at any time. Upon death, a trustee you appoint ensures property is transferred to those you selected as beneficiaries. An irrevocable living trust avoids probate but requires you to give up your right to revoke.
- Asset ownership – Assets that have title ownership can be setup so that the title automatically passes to a co-owner. The co-owner, however, would have to agree to any loans secured for the property. Also, careful consideration of value should be made for titled property which could trigger a federal gift tax.
- Insurance – As part of a robust risk mitigation plan, Insurance policies can help you cover not only your assets, but also your debts, care, and even burial costs. These include life, disability, automobile and homeowner policies and they are generally used at different intervals in your life. The Life Events Timeline can help you assess your needs.
- Business Succession Plan – For business owners, a succession plan details a roadmap for smooth transition of ownership after death or should you become incapacitated.
Wealth Transfer Planning
Wealth transfer planning involves the smooth transition and distribution of wealth according to your wishes. With proper estate planning, you decide to whom, how, and when your assets will be distributed, as well as who will manage your estate or business. Special issues you may deal with are providing financial security for others, planning for children of a previous marriage, equalizing inheritances fairly, and retiring from your business.
Wealth transfer planning also involves the management of assets during disability or incapacity. It takes the burden off family members and makes your wishes clear.
Another tool to consider is a Letter of Intent. Often, this serves as a statement of desires. Though not a legally binding document, it can offer your executor guidance. You should include details like:
- Who to notify of your death or incapacitation
- Wishes and desires on what happens to your children
- Location of assets, documents and even hidden cash
- How to distribute mementos
- Details on accounts login ID and passwords
- Burial desires
- For business owners, business continuity instructions
For some people philanthropy represents the very essence of giving back to the community, caring for others, and leaving a legacy. We can help you with your charitable giving goals including private foundations and charitable remainder trusts.
Our process does not end with your estate, we coordinate your estate plan with your overall financial plans for your business, investments and insurance as well.
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