For most people the thought of a spouse or significant other dying early is inconceivable. Though it is not easy to think about, what would happen today to your children, or spouse, or significant other if something should happen to you unexpectedly? Estate planning removes any doubts as to what your wishes are for the future. Acting now allows you (as opposed to others) to decide how your finances, assets, and loved ones will be cared for when you are no longer available to make the tough decisions in life. Planning your estate in advance helps you regulate and protect your assets while you are alive, empowers you to effectively transfer assets to your specified beneficiaries at death (or before), and gives you the chance to protect your loved ones inheritances. The inherent components of an estate plan are as multifaceted as the individuals who create them.

Proper estate planning allows you to:

• Control who looks after you and your finances when you are sick;
• Plan for estate and income taxes;
• Transfer wealth to future generations effectively; 
• Care for your loved ones when you are unable to; and,
• Make your future wishes known during your lifetime.

ESTATE PLANNING SHOULD START TODAY

If you are a parent of young children, recently married, planning to start a family, or focused on starting your career, it is likely that you have not taken the time to think about thoroughly planning your estate. The estate planning techniques and tools used for young couples with children or single parents differ than those used for older parents with adult children. For instance, because your estate is still growing and you are probably saving for your child’s education, gifting is unlikely to be a part of your estate planning tactic. Trusts are a powerful technique that benefits both younger and older estate planners. Despite the fact that it is unpleasant to think about you or your spouse dying, or leaving your children you must think ahead. Even if you are in the early stages of marriage or planning to start your family it is imperative that you think about what will happen if you are not here to provide for loved ones. Estate plans ensure your family’s financial security if either spouse were to die.

HOW A TRUST CAN HELP YOU

A trust can protect your children when you or your spouse dies, as well as minimize estate taxes and avoid probate court. Assets passed to loved ones by means of a will have to go through a judicial process called probate. This process opens up the will to challenges by others, is time consuming, and costs money. Assets held in a Trust do not have to go through the probate process. A Trust can be either “revocable” or “irrevocable”. Under a revocable (or living trust), your assets are maintained under your control, thus they are still subject to estate tax. Under an irrevocable trust however, your assets are considered by the IRS to be outside of your estate and no longer under your control, thus they will not be subject to estate taxes when you die.

If your surviving spouse is not certain about managing considerable assets, or if both you and your spouse die, a revocable (or living trust) can equip your family with professional money managers if desired. A revocable trust can enlist an institutional trustee to invest and distribute the funds according to your estate plan. This type of trustee, typically a bank, can manage and provide the principal to your family for their essential needs, education, healthcare, reasonable comfort, and any other needs you consider valuable to the life and care of your loved ones.

ESTATE PLANNING FOR YOUNG CHILDLESS COUPLES AND SINGLES

Just because you don’t have children does not mean that proper estate planning is not a useful tool for you. If something were to happen to you without an estate plan your heirs (parents, siblings, other relatives, or friends) will not only have to wait months or even years for the probate court to approve their inheritance, but some of your assets may be lost to estate taxes.

The first step is to create a will or living trust that will provide for your heirs or any children you may have in the future. If your combined estate is worth at least $1,000,000 creating specialized trusts will help minimize the amount taxed from your estate. Powers of attorney for property and healthcare are also essential documents that everyone should draw up so that in the event that you are incapacitated or unable to make critical decisions for yourself your loved ones will have your instructions to follow.

PLANNING FOR DEATH TAXES

Though most of us feel that we are overtaxed during out lifetime, the federal government still reviews your estate at death to confirm that you do not owe federal estate tax. Whether or not there will be any taxes to pay on behalf of your estate is dependant on how your estate plan is set up and the size of your estate. While there are many well-established tactics that can be put in to effect to decrease or remove death taxes, the planning process must start early to effectively implement many of these helpful plans.

Protecting Inheritances, Preserving Values, & Extending your Legacy

• Some lawyers’ principle goal of estate planning is to transfer the maximum amount of wealth to your beneficiaries as tax free as possible. While we recognize this as a significant goal, we believe the cornerstone of estate planning should be the furtherance of our client’s character and principles while protecting our client’s predetermined beneficiaries.
• If you delve deep enough, you will find that most clients have explicit objectives as to how they would like their beneficiaries to handle their inheritance. Furthermore, most clients typically have a strong desire to assure their beneficiary’s inheritance is protected from potential outside forces, such as “creditors and predators.”
• An extensive estate plan covers many of the following family preservation and protection concerns and strategies:
  • If you pass away before your child turns 18 you are legally required to appoint someone who would be the best fit as “back-up parents’ for minor children. Your estate plan should nominate a desired guardian that would provide the necessary care, love and nurturing environment.
  • Spendthrift Trusts are regularly established for “continuing trusts” to minor or other beneficiaries who lack the ability to manage their inheritance. Parents who believe their child will be financially mature to manage the trust can be “lifted’ so that complete access and control may be to that child.
  • Incentive Trusts are used to instill values and provide incentives for the activities, life styles, work ethics, etc. that the client desires to pass along to their children. 
  • Lifetime Inheritance Protection Trusts are also used to include all the benefits of the other listed trusts so that even when the “conditions” are met the trust continues. This keeps the trust principal free from “creditors and predators”. It also protects the inheritance held in trust for adult beneficiaries from potential future divorces, and lawsuits. 
  • This type of planning protects and cares for beneficiaries who have (or may develop) “special needs’ or disabilities as desired by the client.
  • The risks of “affluenza” for beneficiaries who are going to receive significant inheritances are also addressed and minimized.