In a Nutshell
Estate planning involves the process of managing, conserving, and transferring your property and wealth while considering personal, emotional, legal, and/or tax objectives in addition to planning for the possibility that you may one day require assistance from someone else to help you manage your affairs.
While nobody wants to think about death, disability, or the possibility of being unable to manage their own affairs without assistance, it is much better to be prepared for those events in advance.
A properly drafted estate plan should take into account all the factors – personal preferences, financial considerations, your health, the health of your intended beneficiaries, charitable desires, and everything else not listed here that is important to you – so that it is unique and addresses your specific set of circumstances.
Reasons Why You Should Plan
- You may wish to provide an inheritance for a child with a disability without jeopardizing that child’s ability to receive public benefits.
- You may wish to provide for someone they love that is suffering from addiction related issues. The estate plan can be designed so that it provides incentives for the afflicted individual to take steps towards recovery.
- Second marriages (or third or fourth marriages) present additional challenges. A simple “I love you” Will to your current spouse may ultimately have the effect of disinheriting your children. There may be some tension or conflict between children from prior marriages and step-parents.
- Protect the assets of the “first to die” spouse’s estate from being inadvertently depleted by the surviving spouse should the surviving spouse get remarried.
- It may be important to avoid additional probate proceedings in other states. For instance, Florida probate courts will not have jurisdiction over that vacation home in the Hamptons. In this case, just a “Will” will not get the job done.
- Prior to recent changes in federal estate tax law that resulted in fewer estates being subject to federal estate tax, minimizing estate taxes payable to the federal government was an overriding concern for many folks, whereas now income tax and capital gains tax planning may be more important.