You may have an abundance of wealth or you may only live a modest life. No matter your age, marital or financial status, you can benefit from an estate plan.
According to the American Association of Retired Persons (AARP,) over 50% of American adults, and 78% of millennials do not have a will or living trust.
Your personal needs and wealth allocation are only a couple of the six benefits of estate plans discussed below.
- Decision-makers: If you’re put in a circumstance, whether medical, travel-related or otherwise that leaves you unable to make a decision, a living or revocable trust holds assets for you while you’re alive and names those you wish to receive said assets and property when you die.
- Wealth distribution: When you pass away, you want your wealth and legacy to live on. A will is a universal estate planning document that is assigned an executor or personal representative to follow your wishes and allocate property accordingly. With a will, you can also assign a guardian for your minor children. Some assets, like life insurance, retirement accounts, and annuities require named beneficiaries, thus they don’t need to be included in a will, but don’t forget about them.
- Minimize taxes on wealth transfers: Thanks to The Tax Cuts and Jobs Act of 2017, you are now allowed to distribute more money at the time of your death, 0r while you’re alive, with tax transfer fees. The act also allows individuals to supply yearly tax-free gifts to beneficiaries up to $15,000 and $30,000 for married couples and may medical and educational expenses without having to pay a “gift tax.”
- Philanthropic planning: Do you want some of your assets to go toward an important charity? If so, planning must be done ahead of time.
- Protect family wealth: wealth transfer strategies go hand in hand with wealth protection. If your family is well-to-do, consult an estate planning attorney to determine which wealth protection method (there are numerous) is right for your situation. These methods are designed to protect your assets from creditors should lawsuits and claims pop up.
- Wealth preservation for future generations: Preserve your family’s wealth for the long term by developing an estate plan. Estate plans allow you to determine planning goals, initiate family conversations about the best way to allocate your wealth and educate your children; especially adult children about financial approaches to create and sustain the family’s wealth and legacy.
Estate planning can be scary because it makes you think about your future and eventual death, which, let’s face it, is a topic many people want to avoid at all costs. If you want your family and loved ones to be secure, take the wise step of creating an estate plan.
