When you think of estate planning, you can imagine someone very rich and believe that this does not apply to you. estate planning is one of the key areas of financial planning that you must address throughout your life. To reiterate, estate planning isn't just for the rich. It's about putting in place a plan that will protect you and everyone you love, regardless of your wealth.
Everyone has a heritage, and all their assets, both physical and intellectual, form that heritage. You don't have to be rich or have a certain amount of assets to use the word “wealth”. People think estate planning is for the rich only because they usually hear about it in that context; a film shows a wealthy family gathered around a lawyer reading from a will, an actor's estate gives permission to use his image, etc. Actually, you have a property even if all you have is the clothes you're wearing.
While it's vital to create a plan for your estate if you have a lot of assets and money, it's also important to develop a plan if you don't have many. A common misconception about estate planning is that only “wealthy people need it. In reality, there are countless benefits associated with having a comprehensive estate plan no matter what your tax category. In most situations, it's much less expensive to have an estate plan than it is to try to go through the probate process to manage and distribute your estate.
There are taxes to consider that, if you don't make the right decisions, they can deplete the amount of your estate. Work with a Professional to Learn Your Options You don't have to complete your estate planning alone. If you want your assets and loved ones to be protected when you can't do it anymore, you'll need an estate plan. If estate planning was ever considered something only high-net-worth people needed, that has changed.
Even a little estate planning can allow couples to reduce much or even all of their state and federal estate taxes. And of course, if you have had more than one spouse or have children from more than one family, an estate plan is urgent. An irrevocable trust is a trust that allows the creator of the trust to obtain the assets placed in the trust outside of his estate and not be subject to any estate tax. The unexpected young death of Robin Williams as a result of a suicide is tragic, and his estate has not been without its challenges.
Without a proper estate plan, your spouse, children, and stepchildren may disagree on the distribution of your estate. Without a plan in place, resolving your affairs after your trip could have a lasting and costly impact on your loved ones, even if you don't have an expensive home, a large IRA or valuable artwork to convey. Be wary of estate planning lawyers who try to convince you with the idea that a living trust is more expensive and not a better option than a will. Although this is the easiest option for most, there is somewhat limited control over the distribution of assets, as your estate will likely have to go through the legalization process after your death.
Because they live an average of six to eight years longer than men, more women have to make end-of-life plans after the death of a male spouse. Estate planning can be difficult and very challenging, especially if you are a high net worth person (HNWI). Through wills, trusts, pre-death family conferences, and myriad other estate planning techniques, it is possible to keep family matters private after death. Petty's wishes were for his wife to ask Petty's daughters for their opinion on how the inheritance would be managed.
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