October 24, 2013. It is startling though not surprising that an overwhelming majority of people do not have an estate plan in place. Estimates place it at as much as 70% of the population. Often, the reasoning for its absence is that one does not have enough wealth, though even those with significant assets put off planning under the assumption that tomorrow will always come.
Estate planning isn’t just for the young or old, the wealthy or those of modest means. Estate planning, when it is done right, is a balance between financial and non-financial concerns. It is about driving down costs as much as saving on taxes. It should promote efficiency and privacy. But it is also about providing for those you care about through your legacy and values. It is about helping them come to terms with the process now rather than dealing with it later through a muddled estate, a drawn-out court process, and a host of questions they can never ask you.
Below are a couple things to think to help you move forward in your decision to complete your estate plan.
Estate Planning Can Be All About the Money
- The federal tax exemption is currently $5.25 million, but there is no guarantee it is here to stay. That is $5.25 million you can pass on and not be taxed. It would be wise to plan now to take advantage of the tax savings..
- Laws change. As they do, an updated estate plan can make use of beneficial changes while combating damaging ones.
- You might not have to worry about federal estate taxes, but there are always state death taxes and they are much harder to avoid.
- Probate can be uncomfortable. And expensive. Attorney fees and court fees can drain much of your estate, much more so than what planning today would cost you.
- The economy changes. Sometimes for the worse. It is important to have some plan in place to preserve your wealth and protect yourself in retirement or in declining health.
Estate Planning Is Also Not About the Money
Sometimes economic and tax planning need to take a backseat to something more important.
- Poor planning could leave your family divided or upset with one another and you.
- No planning could leave those you care about with little or nothing of your estate.
- The large federal tax exemption means you have more latitude to plan how you want to, and not just focus on what saves you the most in taxes.
- A good estate plan should consider needs, context, and circumstances. Does one child have a disability? Does one have a greater need? Is an even split best for all?
- A plan should also consider your future hopes for the house, the farm, the business. Planning today ensures your wishes and values are implemented tomorrow.
How to Get Started With Your Estate Plan
- Begin light. Review your financial position.
- How much do I have?
- Where would it go?
- How do I want my children and family cared for?
- Start a conversation.
- Talk with those that matter: Spouse. Children. Siblings. Family. Friends. Loved Ones.
- Layout your hopes, goals, plans, and wishes and then outline what you would have an estate plan do.
- Goosmann Trust Law Counsel has Planning Worksheets and a Goal Identification Form to assist you in this.
- Contact an attorney. Make a plan.
- Lastly, don’t put this off. You do not want a day to become a week, to become a month, to become a year… to become too late.
For more information on estate planning, contact Goosmann Trust Law Counsel at info@goosmannlaw.com or by calling 712.226.4000.