Either way, a trust protects the beneficiary. 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. People work hard to accumulate whatever level of wealth they have.
It is important that this wealth be distributed to your heirs in accordance with their wishes. Lack of planning, such as not having a will, can cause your state's intestate laws to dictate how your estate is distributed. Estate planning also helps you prepare for situations where your health worsens or you become disabled, by drafting power of attorney for financial and medical decisions. Start with a conversation with one of the bank's expert wealth and trust planning services professionals.
He or she will get to know you and your situation and make recommendations based on that, not from a generic questionnaire that lists your assets. They will listen to your story and understand your family's dynamics, both good and bad, so that the best decisions can be made. In addition, he or she can connect you with other trusted local professionals (such as an attorney) to help you implement appropriate protections and plans. The first question to ask yourself is when should estate planning begin? A major life event (such as having a child) or a major purchase (such as buying a home or property) or an investment should fuel the debate.
Who should care for your child if you die? What happens if you become medically incapacitated? How will your assets be distributed? Making those decisions ahead of time makes it easier for your family. Even small investments can benefit by considering tax implications during estate planning. Often, people try to give away investments to their heirs, worrying that clinging to them and having them go through inheritance would create a greater tax burden. Be sure to consult a tax professional when you address this area of your estate planning.
And know that your individual situation may have exceptions to any advice or example here. Talking about how best to care for you and distribute your assets as you age is never an easy conversation. But we hope you can use this information as a good starting point for your conversation with an estate planning or fiduciary professional. What we do tomorrow is the product of what we achieve now.
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. While estate planning does affect the very wealthy, it can also dramatically affect those with moderate resources. One of the simplest first steps you can take now is to make sure your beneficiary designations are up to date in your life and retirement insurance plans.
My parents didn't prepare well. His wish was that his farms would be sold and that the profits be divided between his three children. They had wills, but nothing specific. It was a nightmare for my brothers and me.
I swore that I would never do that to our children. How We Use Your InformationCollection Notice for California Residents. In a society centered on youth, it is difficult to contemplate aging, let alone death. Many young people assume, incorrectly, that estate planning is only for the elderly or the very rich.
There are four reasons why everyone, regardless of age, should consider preparing at least some estate planning documents. A common misconception about estate planning is that “wealthy people need it.”. In reality, there are countless benefits associated with having a comprehensive estate plan regardless of 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.
Wills should be prepared by a professional who is well-versed in estate planning, including the laws of your specific state. All you have accumulated in your life is your wealth, and having a plan to manage it, and even your own life, is not only smart, but often necessary. 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. In the meantime, investors should always be sure to review their estate plans, perhaps at the end of each year or during tax season, and certainly during life-changing events, such as the birth of a child, a divorce, or an irreconcilable difference with a loved one.
Effective wealth management allows you to manage your affairs during your lifetime and control the distribution of your wealth after death. This is the simplest and most direct reason why the importance of estate planning transcends the high net worth segment. Estate planning ensures that you care for your loved ones, provides assistance to children and grandchildren, or supports a charity of your choice, among other benefits. However, without an estate plan, naming a minor child as the beneficiary may not protect your financial interests; instead, it could have the opposite result.
An effective estate strategy can explain your health care wishes and ensure they are met, even if you can't communicate. On the other hand, if you specifically don't want your partner to inherit from you or act as your spouse, you also need an estate plan. Just as you would prepare health and long-term policies in case of illness, estate planning allows you to designate how you want your assets to be distributed after death. An irrevocable trust is a trust that allows the creator of the trust to obtain assets placed in the trust outside of his estate and not be subject to any estate tax.
If you want your partner to inherit from you or could make medical decisions on your behalf if you become incapacitated, you need an estate plan. If you or your spouse have children from a previous relationship, you need an estate plan regardless of whether your children are minors or adults. . .