An estate plan can be simple if you only own a few assets, or complicated if you have significant assets. Some strategies are easier to implement, like a last will and testament. Others can be simple or complex, like trusts. Whatever your needs, an estate planning attorney will be able to give you the guidance that your unique situation requires. Your estate planning attorney may work with your financial advisor and accountant to be sure that your financial and legal plans work together to benefit you and your family.
There are circumstances that require special estate planning:
- If your estate is valued at more than the federal gift and/or estate tax exclusion, which is $11.4 million per person in 2019
- You have minor children
- There are family members with special needs who rely on your support
- You own a business
- You own property in more than one state
- You want to leave a charitable legacy
- Your property includes artwork or other valuable collectables
- You have opinions about end-of-life healthcare
- You want privacy for your family
The first step for any estate plan is a thorough review of the family finances, dynamics and assets. Who are your family members? How do you want to help them? What do they need? What is your tax picture like? How old are you, and how good is your health? These are just a few of the things an estate planning attorney will discuss with you. Once you are clear on your situation, you’ll discuss overall goals and objectives. The attorney will be able to outline your options, whether you are concerned with passing wealth to the next generation, avoiding family disputes, preparing for a disability, or transferring ownership of a business.
A last will and testament will provide clear, legal direction as to how your assets should be distributed and who will care for any minor children.
A trust is used to address more complex planning concerns. A trust is a legal entity that holds assets to be used for the benefit of one or more individuals. It is overseen by a trustee or trustees, who can be individuals you name or professionals.
If you create trusts, it is important that assets be retitled so the trust owns the assets and not you personally. If the assets are not retitled, the trust will not achieve your goals.
Some property typically has its own beneficiary designations, like IRAs, retirement accounts, and life insurance. These assets pass directly to heirs according to the designation, but only if you make the designations on the appropriate forms.
Once you’re done with your estate plan, make a note on your calendar. Estate plans and beneficiary designations need to be reviewed every three or four years. Lives change, laws change, and your estate plan needs to keep pace.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.
Reference: WMUR 9 (Aug. 1, 2019) “Money Matters: Estate planning”