Estate Planning

You may have thought "I'll worry about estate planning when I'm older." or "My estate is too small to have an impact." Making excuses to delay estate planning is easy, but could be costly. If you are unprepared when a tragedy happens, your family's financial future may not be protected. While there is no designated age for beginning to plan your estate, waiting too long may rob your beneficiaries of much of their inheritance. This is why it is important to start your estate plan early, before a plan is needed.

The Basics

What if something were to happen to you today? Do you have a will? Do you have a trust? Have you allocated your assets?

A will is the cornerstone of your estate plan. It provides for the distribution of your assets, names a guardian for your children who are minors, and appoints an executor to see that your wishes are carried out as stated by you. If you die intestate (without a will), the court will make all these decisions for you. Essentially, failing to make a will strips you of the ability to control your assets and may jeopardize a family's financial status upon one's death.

Minimize Estate-Tax Consequence. You don't need a financial advisor to tell you that you do not want a large portion of your assets to go to the government in the form of estate taxes. But this is a common consequence for people who do not plan ahead. Under the tax law's marital deduction, you can generally transfer all of your assets to your spouse estate tax-free. In this manner, the government has done some estate planning for you, but there is more that can be done.

When your spouse dies, any remaining property will be included in your spouse's estate. If the total exceeds the unified credit exclusion, taxes on your spouse's estate could take a substantial part of the inheritance away from your heirs. One way to minimize the estate taxes your beneficiaries will have to pay is to establish a trust that will distribute income to your spouse during the course of their lifetime while sheltering assets for future heirs.

Business Succession Planning

If you own a business, what would happen if you were to die unexpectedly? Without proper planning, part or all of your business could suffer unless a competent manager succeeds you and a well-structured plan for ownership transfer is in place. There are many methods to accomplish a successful business succession including partnerships, buy-sell agreements and stock transfers. Once a plan is created strategies, such as trusts and life insurance, may be used to ensure that your family remains financially stable.

Leave a Paper Trail

An estate plan is moot if no one in your family knows what it is. It makes sure your wishes are carried out correctly; be sure to maintain clear records. We at Family Wealth Partners can help you make an itemized list of your assets, including securities, real estate and life insurance policies, along with information to identify and locate these assets. Along with a list of assets, creating a list of liabilities is beneficial to know where your financial situation stands in the event of immediate death.

Personal information, such as Social Security numbers and birth certificates, should be stored in a secure yet accessible place. Included with these records should be cemetery plot records, detailed funeral instructions and contact information for your attorney, accountant, executor, trustee, and of course, financial planner.

The consequences of waiting too long to plan your estate can be devastating, both financially and emotionally. Getting a plan together in a timely manner will ease the burden for your family and could potentially save millions of your dollars. Wills and trusts can be placed in many different forms, so please feel free to schedule an appointment to discuss your estate planning in further detail and check out some resources we have available for you on our tools page.