Estate Plan – Protect your wealth
After a loved one’s death, there are often complications concerning money and understanding how to go forward financially. While it is hard to think about your own mortality in the event that you become ill or incapacitated, estate planning can help to plan for the inevitable. Estate planning can provide you with a great sense of relief knowing that the people you care most about will be protected.
Estate planning is not just for the wealthy. Some of the basics include not titling the accounts correctly, forgetting to update beneficiary information, and not having a will. Effective estate planning transfers your assets as you intended in a tax efficient manner that minimizes transfer costs, thereby helping to preserve the wealth that you worked so hard to secure. If you plan in advance, you can potentially save upwards of hundreds of thousands by avoiding probate, not losing your assets to the state, and by lowering your estate taxes.
Properly titled assets can reduce the burden on your loved ones at a time when they are still in mourning. The less decisions that need to be made when emotions are running high, the better your family will be able to cope with unexpected burdens. You can help to give yourself more peace of mind by working with an attorney to create these estate planning documents:
1) Will – A legal document that designates how you want your money to be distributed after your death. It also gives other instructions regarding your burial arrangements, or who will care for your children. You can learn more about the different types of wills here.
2) A power of attorney – A legal document that authorizes a trusted person to act for you in your place. An estate planner can help describe the different types of power of attorney’s. You can find more information here.
3) Medical power of attorney – A legal document that appoints someone to make health care decisions for you. There is also a living will which is actually not a will at all. It is a legal document that expresses your last wishes regarding end of life decisions.
4) Trusts – A well written trust helps to protect your assets and set forth who will manage your assets during your lifetime. A trust is a structure that gives legal title to the assets of one party who is the trustee and this trustee manages your assets for the benefit of the beneficiary of the trust. Creating a trust can be helpful in the following ways:
- Avoids complex probate
- Distributes assets to heirs efficiently – create timetables for disbursements
- Saves on taxes (generation-skipping)
- Eliminates concerns for a family member who has a disability
- Avoids unintended estate taxation of insurance policies
- Dispels potential conflicts in cases of remarriage and extended families
- Creates tax efficient charitable giving
- Protects assets from creditors and lawsuits
- Avoids medicaid “spend down”
- Insures your assets are used for your benefit if you ever become sick
There are many different types of trusts that have been created for almost any type of financial situation that you can imagine. It is best to speak with an estate attorney about your particular circumstance. An estate planner will help make certain that your will and trust are coordinated. Assets such as a retirement account, life insurance policy, annuity, will pass directly to the named beneficiary on that account. Mistakes are made when these beneficiaries do not match your wishes in the will. This could potentially create unintended conflicts which may trigger unfortunate court battles within your family. It is critical that you understand how your assets are titled and the legal consequences of the titling. You should speak with an expert on the different ways that you can title assets. Common forms of property interests include Tenancy in Common, Joint Tenancy with Rights of Survivorship, and Tenancy by the Entirety.
Summary
You have worked hard to earn your money. Now is the time to take the next step and protect your wealth in manner that creates a plan for your loved ones . This will help to reduce the complications that may arrive financially if there happens to be a change in your health. The estate attorney I have partnered with can create an estate plan for you at a very reasonable cost. If you would like to learn more how I can help prepare your estate plan or if you have any questions, feel free to give me a call at 508-207-8049 or send me an email to mitch@cgfadvisor.com.
Mitch is a Certified Financial Planner™ and Chartered Financial Analyst whose passion is investing and helping others achieve their financial goals. Give us a call to schedule your free consultation and we can help give you peace of mind.
Please read our disclosure statement regarding the contents of this post and our website as a whole.
Advisory services offered through Constant Guidance Financial LLC, a registered investment adviser.
