Estate planning is commonly viewed as a way to transfer one’s assets after passing away. However, a comprehensive estate plan serves many objectives beyond administration of an estate—it addresses your need to stay in control of your estate while you’re alive and healthy, and provides instructions for your care in the event you become disabled. In addition, your estate plan allows you to designate guardians for your children during a period of disability or upon death.
An estate plan is a powerful tool you can use to address your specific needs and concerns. For example, you might want to protect a loved one’s inheritance from creditors, or ensure that their inheritance will be protected from their liberal spending habits. If you have a blended family, you might want to ensure that your estate is distributed to your children and not those of your spouse. If you have children who are likely to inherit when they are not mature enough to make sound financial decisions, you can create a distribution schedule according to their ages. You can even make their attendance at a college a condition of receiving their distributions.
In order to maximize the amount of the estate available for your loved ones, it is important to take advantage of tax planning tools appropriate to your situation. For example, you can reduce the estate tax exposure by making gifts during your life of assets that you plan to leave to certain beneficiaries. This reduces the estate’s total value, which is the amount used to determine the estate tax liability. In addition, married couples can give a certain amount to the surviving spouse tax-free.*
Creating an estate plan involves far more than listing beneficiaries, trustees, and executors. During your consultation with us, our goal is to uncover your hopes and concerns, and tailor a plan to fit your specific goals.
*While there is no estate tax in 2010, tax planning will again take a central role in 2011 and beyond.
