Q. What is Legacy Wealth Planning?
A. Legacy Wealth Planning is the creation of a definitive plan for managing your total wealth while you’re alive, distributing your estate how you choose after your death, and a clear plan to pass on your legacy. Your estate includes all assets of any value that you own. This includes non-financial assets as well as financial assets, including real property, business interests, investments, insurance proceeds, retirement accounts and personal property. Your legacy incorporates important decisions ensuring your family core values, responsible behaviors and community involvement are passed on to future generations. Keep in mind, your legacy also includes personal effects, such as family heirlooms, stories, and accumulated wisdom and life lessons of your family.
Q. What is “traditional” estate planning?
A. Traditional estate planning (Wills and Trusts) focuses on the accumulation, the preservation, and the distribution of only your financial assets and worldly possessions. It protects material wealth from probate and minimizes taxes.
Q: Why do I need an estate plan?
A: Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.
Q. What is the difference between “traditional” estate planning and Legacy Wealth Planning?
A. Traditional estate planning is focused on financial assets and is concerned with avoiding probate and estate taxes. On the other hand, Legacy Wealth Planning is concerned with financial and non-financial assets of a family and creating a family’s personal legacy plan. Legacy Wealth Planning addresses how to capture and transfer family traditions and values, as well as protecting financial wealth for current and future generations.
Q: If I don’t create an estate plan, won’t the government provide one for me?
A: YES. But your family may not like it. The government’s estate plan is called “Intestate Probate” and guarantees government interference in the disposition of your estate. Documents must be filed and approval must be received from a court to pay your bills, pay your spouse an allowance, and account for your property–and it all takes place in the public’s view. If you fail to plan your estate, you lose the opportunity to protect your family from an impersonal, complex governmental process that can become a nightmare. Then there is the matter of the federal government’s death taxes. There is much you can do in planning your estate that will reduce and even eliminate death taxes, but you don’t suppose the government’s estate plan is designed to save your estate from taxes, do you? While some estate planners favor Wills and others prefer a Family Wealth Trust as the Estate Plan of Choice, all estate planners agree that dying without an estate plan should be avoided at all costs.
Q. What is a Family Wealth Trust?
A. A Family Wealth Trust is the main component of a Legacy Wealth Plan and covers important issues other than avoiding probate.
Q: What’s the difference between having a Will and a Living Trust?
A: A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for “prove the Will.” Upon your death, the Will becomes a public document available for inspection by all comers. And, once your Will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys. Probate can be cumbersome, time-consuming, expensive, and emotionally traumatic during a family’s time of grief and vulnerability. Con artists and others with less-than-pure financial motives have been known to use their knowledge about the contents of a will to prey on survivors. A Living Trust avoids probate because your property is owned by the trust, so technically there’s nothing for the probate courts to administer. Whomever you name as your “successor trustee” gains control of your assets and distributes them exactly according to your instructions. There is one other crucial difference: A Will doesn’t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Family Wealth Trust can help you preserve and increase your estate while you’re alive, and offers protection should you become mentally disabled.
Q. How does a Family Wealth Trust differ from a Revocable Living Trust?
A. Most Revocable Living Trusts are primarily concerned with avoiding probate and estate taxes. A Family Wealth Trust offers lifetime benefits, and protects wealth for current and future generations.
Q: The possibility of a disabling injury or illness scares me. What would happen if I were mentally disabled and had no estate plan or just a Will?
A: Unfortunately, you would be subject to “living probate,” also known as a conservatorship or guardianship proceeding. If you become mentally disabled before you die, the probate court will appoint someone to take control of your assets and personal affairs. These “court-appointed agents” must file a strict accounting of your finances with the court. The process is often expensive, time-consuming and humiliating.
Q. Why should I have a Family Wealth Trust?
A: Not only does a Family Wealth Trust provide for the disposition of your property (like a Will), but it also offers the following benefits:
Q: If I set up a Family Wealth Trust, can I be my own trustee?
A: YES. In fact, most people who create a Family Wealth Trust act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court’s appointee.
Q: Will a Family Wealth Trust avoid income taxes?
A: NO. The purpose of creating a Family Wealth Trust is to avoid living probate, death probate, and reduce or even eliminate federal estate taxes. It’s not a vehicle for reducing income taxes. In fact, if you’re the trustee of your Family Wealth Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.
Q: Can I transfer real estate into a Family Wealth Trust?
A: YES. In fact, all real estate should be transferred into your Family Wealth Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Family Wealth Trust, there is no probate anywhere.
Q: Is the Family Wealth Trust some kind of loophole the government will eventually close down?
A: NO. The Family Wealth Trust has been authorized by the law for centuries. The government really has no interest in making you or your family suffer a probate that will only further clog up the legal system. A Family Wealth Trust avoids probate so that your estate is settled exactly according to your wishes.
Q: How do I know if I have a “bare bones” living trust?
A: Very few estate planning attorneys offer Legacy Wealth Planning. A “bare bones” living trust covers probate avoidance and usually ignores important issues to protect you, your spouse (if married) and your children. Bring your existing trust to your free one-hour consultation and we can review it for you.
Q: If I have a “bare bones” living trust should I go back to the attorney who drafted the trust?
A: You can certainly go back to the attorney you worked with before, however, few attorneys offer Legacy Wealth Planning. If you want Legacy Wealth Planning, contact a member of the American Academy of Estate Planning Attorneys.
Q: Is a Family Wealth Trust only for the rich?
A: No. A Family Wealth Trust can help anyone who wants to protect his or her family from unnecessary probate fees, attorney’s fees, court costs and federal estate taxes. In fact, the Family Wealth Trust offers substantial protection for your family, regardless of your total estate. In addition to savings at death, especially if your estate is over $100,000, the Family Wealth Trust also provides savings and peace of mind during life, because it avoids the expense and emotional nightmare of an incapacity or “living probate” proceeding. Also, a Family Wealth Trust protects spouses in the event of remarriage after one spouse dies and affords greater protection for children.
Q: Can any attorney create a Family Wealth Trust?
A: YES, but you would be better off choosing an attorney whose practice is focused on estate planning. Members of the American Academy of Estate Planning Attorneys receive continuing legal education on the latest changes in any law affecting estate planning, allowing them to provide you with the highest quality estate planning service anywhere.
Q: What steps can I take to preserve my legacy?
A: The best approach is to meet with an attorney who understands the Legacy Wealth Planning process. This will ensure you address the financial and non-financial assets of your family. The right attorney will help you, first, set up a Family Wealth Trust to preserve your financial legacy. Then, you will be educated about completing the My Legacy workbook, to share in your own words about your life story, family history, memories, and life lessons. And finally, writing a Legacy Planning Letter to distribute your cherished possessions with sentimental value.
As estate planning lawyers, all too often we speak with people that are looking for “damage control.” They find themselves in difficult circumstances because they did not plan ahead in advance appropriately. Of course, we do everything that we can to provide assistance after the fact, but most often there is only so much that can be accomplished.
They say that the only certainties of life are death and taxes, and everybody prepares for April 15th each year. Strangely enough, the majority of adults have made no preparations at all when it comes to this other certainty. Granted, we know that tax day will come along every year, and most people go forward with the belief that the Grim Reaper is not going to pay them a visit anytime soon.
Yet, you never know what the future holds, and people of all ages pass away each and every day. Estate planning is one of the basic, core responsibilities of adulthood, and everyone should have a plan in place. And when you have a partner or spouse and/or children depending on you, the importance of planning is amplified exponentially.
Since so many people go through life without any estate planning for an extended period of time, when they finally take action, they breathe a sigh relief once and for all. The documents are placed in a drawer or a lockbox somewhere, and these individuals go forward with the idea that the matter is closed.
In fact, estate planning should be viewed as an ongoing process. There are many different things that can take place in your own life that can trigger the need for estate plan updates. One of them would be additions to your family, and of course, subtractions could also render your existing estate plan obsolete. If you get divorced, you are certainly going to want to change your beneficiary designations and adjust other elements of your existing estate plan.
Speaking of marital status changes, if you decide to get remarried after getting divorced, your estate plan will need another round of revisions. One situation that can occur is the desire to protect the interests of your new spouse as you simultaneously preserve inheritances that you want to leave to your children from a previous marriage. This type of situation can be addressed through the utilization of a qualified terminable interest property trust (QTIP).
When you establish this type of trust, your spouse would be the life beneficiary, and your children would be the final beneficiaries. If you die before your spouse, he or she would be able to receive income from the earnings of the trust and live in a home has been conveyed into it. However, your surviving spouse would not be able to change the terms of the trust when it comes to the final beneficiaries. Your children would inherit the assets that remain in the trust after the death of your surviving spouse.
Improvements in your financial status over the years and/or changes to relevant tax legislation can also create circumstances that lead to the need for estate plan revisions. In fact, we just experienced a change that is very relevant to the estate planning community. As of 2018, the federal estate tax exemption is $11.2 million. This is the amount that can be transferred before the estate tax and its 40 percent rate is applied to your estate. Prior to the enactment of the tax legislation, the federal estate tax exemption was $5.49 million. Clearly, this is a very significant difference, and changes like these should definitely be discussed with your estate planning attorney if you are a high net worth individual.
As you can see, there are many things to take into consideration as the years pass, and you should certainly go forward in a fully informed manner. With this in mind, we have scheduled a number of informative Webinars over the coming weeks. You can obtain some very useful knowledge if you attend the session that fits into your schedule, and these Webinars are being offered free of charge. To register, visit our Webinar schedule page, find the date that works for you, and follow the simple instructions.
November 11 is Veterans Day, and people around the country are taking some time to remember the contributions that have been made by former service members. In this post we would like to share some thoughts about retirement and estate planning for veterans.
The Basics
Veterans have the same concerns that we all do when it comes to estate planning. You want to make sure that you are taking all the appropriate steps with regard to the transfer of your assets after you pass away. It is also important to be financially prepared for the different stages of life.
When it comes to the latter component, if you are a careerist you have some great opportunities when it comes to retirement planning. The military pension that service members are entitled to after at least 20 years of service can be a fantastic supplement to Social Security income.
In addition, many people embark on careers in the private sector after serving 20 years. If you joined up after college at the age of 22 for example, you would be just 42 when you leave the service.
You would have an extraordinary resume. Your undergraduate education would have been in place before you joined, and you may well have added onto that while you were in the military.
This presents an extraordinary opportunity for wealth building. You could be drawing a significant retirement pension while you are traversing a civilian career path. If you plan ahead effectively, you could potentially accumulate quite a bit of wealth while you enjoy a comfortable lifestyle.
This would all lead to the ability to enjoy your retirement years to the utmost once you decide to put your working years behind you.
Legacy Planning
Service members are inherently involved in history making. When you have served in the Armed Forces, especially during a time of war, you have experienced things that civilians simply cannot fully grasp.
A legacy plan can involve leaving behind autobiographical notes or memoirs. This can be a gift that has a lasting impact that transcends dollars and cents.
Veterans should definitely consider putting their experiences into writing. You can include these memoirs among your estate planning documents. Family members can learn much, and perhaps ancestors yet unborn can learn some history when they read your reminiscences.
There is also the matter of physical mementos. Veterans often retain ownership of items that hold a great deal of significance to them. When you share the stories that are attached to things that you will be leaving behind, you imbue these items with meaning that can be felt over the generations.
Honoring Veterans
We would like to thank all veterans for their service. Without their sacrifices we would not have the freedoms that we enjoy each and every day.
People who are fortunate enough to enjoy significant financial success are often in a position to create a charitable foundation. When you take this step you can leave behind a profound legacy as your name is associated with philanthropy into perpetuity.
The actor Larry Hagman died at the age of 81 recently, and he will certainly be missed. Though he played a rather unlikable character on the classic television series Dallas, people who knew him say that he was a very nice person who made the world around him a better place.
Individuals who have created artistic works of various kinds leave behind a legacy in the form of their work. Hagman certainly left behind a great deal of his own work, and people will be able to enjoy it for generations to come.
In addition to his legacy as a performing artist Hagman was also an avid philanthropist.
People who start foundations often target causes that are particularly meaningful to them. Hagman greatly valued the creative arts, and indeed, his ability to craft a character before the camera enabled him to enjoy extraordinary financial success.
He gave something back by starting the Larry Hagman Foundation. This foundation assists children in the Dallas-Fort Worth area who have an interest in the creative arts but lack financial support.
Admirers sometimes want to do something in remembrance of a public figure who has passed away. The family of Larry Hagman asks that you make a donation to the Larry Hagman Foundation if you want to pay your respects.
If you are interested in establishing or identifying a foundation that meets your charitable intent, be sure to contact qualified legal counsel to assist you. There are many legal and tax pitfalls that can be avoided with proper advice.
Estate planning for high net worth families is extraordinarily important given the realities of the federal estate tax and any damage that could be done via litigation. In addition to these protections you also have the ability to reach out and support nonprofit entities that you believe in while gaining tax advantages in the process.
This may seem self-evident to anyone who has the financial savvy to have accumulated a significant store of wealth. You must, however, be diligent because constant adjustments may be necessary as things change.
There are changes that take place in your own life such as a divorce, getting remarried, and watching family members depart while others join the family. Of course very significant changes in your financial standing are relevant as well.
In addition to these things that can take place in the life of an individual there are also very important changes that reverberate throughout society as a whole. For example, in 2013 the estate tax exclusion is going down to $1 million while the rate rises to as much as 55%. These parameters will also apply to the gift tax and the generation-skipping transfer tax.
The portability of the estate tax exclusion between spouses ends in 2013 as well. Besides the increased exposure to estate taxes, taxes on dividends and capital gains will be going up if the currently existing laws are not changed in the very near future.
To keep wealth intact you must be ready to adjust along the way, so take advantage of an annual review with your estate planning attorney and stay on top of your financial health.
We all leave behind a legacy when we die -- what your legacy is depends on how much time and effort you put into creating it prior to your death. You don’t have to have a vast fortune in order to create a legacy plan; however, the wealthier you are, the more important it is to create a legacy plan that is consistent with your objectives.
A legacy plan is your chance to elaborate on your basic estate plan. Your basic estate plan allows you to determine who will receive your assets when you die. A legacy plan allows you to ensure that those assets are preserved for generations to come and/or allows you to continue contributing to causes that have meant something to you during your lifetime. Without a legacy plan, your wealth may be significantly reduced by various taxes levied on your estate at the time of your death. In addition, you will lose the opportunity to direct how your wealth will be managed after your death.
A legacy plan often incorporates trusts and other estate planning tools that can allow you to direct how your assets will be used for generations to come. A generation skipping trust, for example can provide income for your children and ensure that assets are preserved for your grandchildren. A charitable trust can be created to provide a mechanism for you to continue to support a cause that was important to you during your lifetime long after your death. Start planning now so you can create a legacy of which you can be proud.
The dictionary definition of the word "legacy" will tell you that your legacy involves gifts of property and monetary assets after your passing. This is of course a large part of it, but there could be more to shaping your legacy than simply arranging for the passing of your assets to your family members.
Depending on your resources exactly how you go about this can vary considerably. There are those who will make a donation that is specifically used to finance some type of building project. This may carry your name into perpetuity, which can be quite rewarding for many people.
Some people will leave behind the resources to provide a scholarship or scholarships to worthy students. This too can be an enriching portion of an individual's legacy.
You can also choose to pass along the wisdom that you have acquired throughout your life by committing your experiences to writing. Some people choose to write a full-blown autobiography and leave it behind for future generations to draw from. Others will author an ethical will that passes along their moral and spiritual values. Today, there are many resources to assist in writing an interesting personal history that can be found online or in bookstores. The same is true of writing an ethical will.
Carefully selecting certain family heirlooms and/or personal possessions and handing them on to particular respective heirs for specific reasons can also be part of a carefully planned legacy.
There are many possibilities to take into account when you are preparing for the latter portion of your life and your eventual death. If you're interested in taking estate planning to a higher level, don't hesitate to get in touch with a Northern Nevada legacy planning attorney to arrange for an informative consultation.
When you consider the subject of estate planning it is useful to recognize the fact that it is an ongoing process. Your initial estate plan is going to be based on a snapshot of your life as it existed at that time. Clearly, things do not stand still and events happen in your life that often times render your existing estate plan obsolete. Things like changes in marital status and additions and subtractions to the family would fit this description.
In addition, there are things that take place that are out of your control that affect your estate planning efforts. Legislative changes that impact the tax code are among them, and with this in mind we would like to take a look at the lay of the land at the present time.
The estate tax and the gift tax are unified, and at the present time there is a $5 million unified exclusion. So if your estate and any gifts that you have given utilizing your unified exclusion do not exceed this amount no estate or gift taxes will be levied. Estates or gifts exceeding the exclusion are taxed at 35%. Keep in mind that any gift exceeding the annual exclusion amount of $13,000 per person, reduces the estate tax exemption by the amount of the gift.
Those parameters are only in place through the end of next year. At that time the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 will expire and the rate of the tax will rise to as much as 55% while the unified exclusion is reduced to just $1 million.
So, this presents an interesting situation. The $5 million exclusion becomes a $1 million exclusion when 2013 arrives, so it would be logical to consider giving gifts to your loved ones in 2012 before the exclusion is reduced.
Of course it is possible that changes to the laws could take place at any time, and this is another factor to consider. Clearly, the pending reduction of the exclusion is food for thought and it is something to discuss with your estate planning attorney.
Some view Social Security as their primary retirement plan. The reality is that this program is a basic safety net that may not provide the financial resources needed for a comfortable retirement.
That said, since most are required to pay into the program it can be viewed as welcome supplement to retirement if nothing more. There are several commonly asked questions that people who are engaged in retirement planning often ask.
The first question most people have involves the age of eligibility. Qualified Americans who were born in 1954 and earlier reach full retirement age in a Social Security eligibility context on their 66th birthday. The age of full eligibility then rises by two months per year through 1959. Anyone born after that becomes eligible to receive their full Social Security benefit when they reach 67.
Another question people often have is whether or not they can work while receiving Social Security. The answer is that once you reach the age of full eligibility you can indeed earn any amount of income and still collect your full benefit.
However, you don't have to wait until you reach your full eligibility age to begin receiving Social Security. You can start receiving Social Security when you are as young as 62, but you receive a reduced benefit. If you work before you reach full retirement age while you are receiving this reduced benefit your payout is cut by one dollar for every two dollars that you earn above a certain annual limit. Right now that limit is $14,160.
The above information is accurate as of this writing but of course it is subject to change. To review current information visit the following website.
Inheritance planning is really a comprehensive endeavor and it entails more than simply directing the transfer of assets via the execution of documents. There are numerous practical considerations that require communication with family and loved ones. Some feel as though they will always have time to communicate their wishes at some point in the future when they have more time. For many the topic of death is s difficult topic to discuss. Though these concerns are certainly understandable, procrastination can leave your loved ones in a difficult situation. You never know what lies ahead and this is what intelligent and comprehensive advance planning is all about.
It is a good idea to ask yourself what your family members would be faced with if you were to pass away on a purely practical level. Are there keys to vehicles and perhaps real property that they should have or be able to obtain? Do you have a safe deposit box? If so, who has access to it? Documents are another matter to consider. Do your your family members know where to find documents that would be relevant to them if you were to pass away? Who has passwords to accounts and other information on your computer files?
Since we live in the digital age a lot of people have important passwords and usernames that their loved ones would need if they were charged with the responsibility of handling the final affairs of the deceased. This can include social network identities as well as business relationships.
These are just a few specific things to keep in mind. Take time to compile a list of items that you should communicate to your loved ones so they will be prepared to handle the practical matters that they will face when the inevitable ultimately takes place.
We seem to live society that is somewhat obsessed with celebrities lives. Some media reports are instructive with respect to estate planning dos and don'ts. It was recently announced that Frenchwoman Liliane Bettencourt, who is the second richest woman in the world, has been declared mentally incompetent to handle her own affairs. Bettencourt is 88 years old and reportedly suffering from Alzheimer's induced dementia. Her family members have been involved in court struggles contending that she has been making bad financial decisions, including the diversion of some $1.4 billion to French renaissance man, Francois-Marie Banier. Bettencourt reportedly sought assistance to create a new will making Banier the sole beneficiary of her estate. The French court has given Bettencourt's daughter Francoise Bettencourt-Meyers and her two grandsons control over the Bettencourt fortune, which is estimated to be valued at about $23.5 billion. According to Forbes this makes Liliane Bettencourt the 15th richest person in the world.
Situations like these provide a window into the way things can go if you do not engage in appropriate planning when you are in full control of your faculties. Whether or not the heiress was a victim of financial exploitation is in question. It may be safe to say that most people would not choose to give away $1.4 billion to someone who is not a family member and then change their will to disinherit their only child and grandchildren when they are in their 80s when they are of sound mind. Some 40% of people age 85 and up suffer from Alzheimer's disease. So yes, something like this could happen to you, which emphasizes the importance of seeking a qualified estate planner to assist in putting together a sound estate plan.
There are a lot of details to take into consideration when you are planning your legacy, and the best way to address them is with the assistance of an experienced estate planning attorney. Rather than being consistently confronted with a series of unanswered questions as you think things through it is much simpler and more efficient to sit down with a legacy planning professional and work through the process from an informed perspective.
Experienced estate planning attorneys know how to proceed under any circumstances and they also understand how to adjust your estate plan on an ongoing basis as changes both within your life and throughout society as a whole take place that impact your existing plan.
One of the intricacies that people often face when they are engaged in inheritance planning involves providing for minor children. There are a number of different ways to proceed, and one of them would be to create a trust and make the child the beneficiary.
You can stipulate whatever you would like to in the trust with regard to what expenditures the trust is empowered to make in behalf of the child while he or she is still a minor. The grantor could then go on to set forth the terms for distribution of assets after the child becomes a legal adult.
Some people allow for the transfer of the total lump sum when the child reaches a particular age, and others arrange for more gradual distributions. You could even choose to include incentives such as allowing for regular distributions while the beneficiary remains in college with a lump sum to follow upon graduation.
Short of creating a trust you could name a property guardian in your will or appoint a custodian under the Uniform Transfers to Minors Act. At a minimum, parents of minor children must have a will where a guardian of the person of your children can be named.
Providing for minor children is an important part of many estate plans. If you would like to learn more details, simply arrange for a consultation with an experienced estate planning attorney.
Estate planning involves consideration of the time when you are incapable of making your own decisions or when you are deceased. This requires the choice of representatives to administer your estate. One of those representatives includes your trustee or personal representative. If you have a trust or will then you have selected someone to perform the hands-on tasks involved in administering your estate. This individual should possess a certain measure of business acumen to handle all of the affairs of the estate. Property will be liquidated in most cases, there will be bills to pay, and the executor will have to bring in a probate attorney and in many cases an accountant and an appraiser. It is natural for some people to automatically choose someone close to them to be a personal representative, but it is not merely a ceremonial role. The practical responsibilities that accompany this title is something to take seriously.
There may come a time when you can no longer make sound medical and financial decisions for yourself. To address this issue you should be prepared with a durable power of attorney for health care and a durable financial power of attorney. Again, you should consider your choice of representatives carefully. You don't have to select the same person to serve both roles. In many cases the best financial mind is not going to be the person that you would like to see making your medical decisions.
Choosing the people who will take care of your affairs upon your death or incapacity is an important part of the process of estate planning. Careful consideration should be given to who who would fill these important roles in your estate plan.
There are a number of misconceptions about estate planning that are simply not true. One of them involves the notion that the estate tax only applies to the "rich." First of all, how is the word "rich" being defined in this context? Multi-billionaires may easily fit this description. However, would you consider yourself rich if you and your spouse accumulated say $2 million over the course of your lives, including any inheritances you may have received? Most people would say no, but if you had an estate valued at $2 million and you took no estate planning steps your estate would be subject to approximately $550,000 in estate taxes if you died in 2013 as the laws stand right now.
Another misconception is that legal representation is too expensive to be worth it. In reality, most people are going to save far more money than they pay when they work with an estate planning attorney. This is why wise people retain legal counsel to assist with their estate planning.
Also there are common sources of asset erosion that can be avoided or minimized, such as the estate tax and probate expenses. You also would want to make sure that your wishes aren't challenged. These are only some of the many reasons why you would do well to work with an experienced estate planning attorney.
The last misconception we will address is the idea that you can establish your own estate plan using general template documents. Estate planning even for very modest estates generally involves many complex considerations that simply cannot be provided for by a form. Many estate planning issues are unique and very personal. The nuances of these types of issues can only be properly identified and addressed by an experienced estate planning attorney.
You find individuals who are in difficult positions sometimes pointing fingers at others who are enjoying a comfortable retirement or benefiting from an estate plan that was intelligently conceived by their loved ones. They say that these people are "lucky" and decry their own lack of such luck. But in reality, those who have no worries simply benefited from proactive, pragmatic planning. And of course they had the self-discipline to stick to the plan. It is as simple as that.
Our law firm understands this to be true and we try to educate people and encourage them to take action so that they can avoid the pitfalls that invariably accompany a lack of preparation. Unfortunately, a very high percentage of Americans ignore this advice and go through life without making important preparations for the future.
The results of a Harris telephone survey that was released at the end of 2009 shed some light on the subject. A total of 1,022 adults responded, and a mere 35% had composed a last will to elucidate their final wishes. Just 29% of the people who were interviewed said that they had a living will in place.
Merely 24% of people under 35 had executed at least one of the commonly recommended estate planning documents, and of course you would expect younger people to be less prepared. However, a surprisingly high 23% of people surveyed who were over the age of 55 had executed no estate planning documents at all.
Clearly, a lack of appropriate planning has reached epidemic proportions. When you shirk this basic adult responsibility, for the most part it is your family members who are going to suffer after your death or incapacity. This is a serious matter, and if you do not presently have at least a basic estate plan in place, do take action and arrange for a consultation with an estate planning attorney before it's too late.
People often tend to procrastinate before they take action and execute the appropriate estate planning documents. Their reasons vary, but it is human nature to prioritize things based on how immediately relevant they may seem.
The current average life expectancy in the United States is over 78 years. So when you are in your 30s, 40s, and 50s you may simply think that you have plenty of time to plan your estate at some point in the future. You may even think that it is better to wait because of pending or unknown factors concerning your estate. The reality is that if you pass away without an estate plan you are potentially leaving your family members a very difficult situation to deal with.
When some finally take the plunge and work with an estate planning attorney to create a plan they put their documents in a lock box mistakenly believing that they are done. It is likely however that your estate plan will need updates as your life changes. For instance your family may experience additions or subtractions through marriages, births, deaths or divorces. The development of a disability by a beneficiary would also require special planning techniques.
Estate planning is best viewed as an ongoing process rather than a one-time event. For this reason it is a good idea to develop a working relationship with a qualified estate planning attorney which will last throughout your life.
If you want to pass a proper legacy and be comprehensively prepared for all the contingencies that you may face during the latter stages of your life, it is wise to think long-term. You hear people throw around the term "luck" quite a bit, but the wise individual knows that you make your own luck. When you see people who are enjoying a comfortable retirement while being able to leave significant bequests to their loved ones they probably didn't find themselves in this position by accident.
Yes, there are people who win the lottery and there are a few who come from very wealthy families. But for the most part, successful people devise intelligent long-term plans and stick to them. If you stick your head in the sand and simply hope for the best you may find yourself completely unprepared as you near what most people would consider to be the typical retirement age.
In fact, you may be surprised to hear just how unprepared a lot of people are. There was a poll conducted recently by AP-LifeGoesStrong.com that was intended to get an idea of how prepared baby boomers are for retirement. One fourth of the people who responded had no retirement savings at all, and a similar percentage said that they would never retire. Because of the fact that the baby boomer generation is reaching retirement age 10,000 people are applying for Social Security every day, and this is supposed to go on for the next 20 years.
So when you combine the facts above you can see that large numbers of people are completely unprepared for retirement. Long-term planning is the key to being able to meet your financial responsibilities when you reach an advanced age while retaining a suitable legacy to pass on to your loved ones. If you do not currently have a solid long-term plan in place, now is the time to get in touch with an experienced legacy planning attorney to arrange for an initial consultation.
Life insurance is a very important and useful element that is included in most estate plans. The most common use for life insurance is as an income replacement vehicle, and it is vital for people who have family members relying on their income. Even if you are relatively young, there are no guarantees and the well-being of your family is at risk if you do not have adequate coverage.
In addition to its value as an income replacement vehicle, life insurance is used in estate planning for other purposes as well, and one of these is to balance inheritances. We will explain what this means by way of example.
Assume that you are the owner of a successful small business, and the value of the business is by far your most significant asset. You have two children, a son named Doug and a daughter named Deborah, and you want to leave them equal inheritances. Doug works in the business, loves the job, and has expressed his desire to assume ownership upon your passing. Deborah has never worked in the business and has no particular interest in it.
A solution for scenarios like this would be to utilize life insurance to balance the inheritances. You take out a life insurance policy on your own life in an amount that is equal to the estimated value of the business, and you make your daughter Deborah the beneficiary. When you ultimately pass on, each of your children will receive an inheritance of similar value.
Enabling the balancing of inheritances is just one of the ways that life insurance can play a role in your estate plan beyond serving as a vehicle of income replacement. To learn more about this and comprehensive estate planning in general, simply arrange for a consultation with an experienced estate planning attorney.
