Estate planning may not be the most exciting or pleasant thing to think about. However once you begin, you’ll see that it allows you to take control of the future in important ways and to take steps toward caring for your family after you’re gone.
Estate planning can be a complicated process involving several moving parts. Your answers to the following questions will guide you in your planning and clarify issues that may have worried you in the past. In this post, we’ll take a look at three fundamental estate planning questions, which we encourage you to ask yourself to reflect on your progress.
As it stands right now, where will your wealth go after you’re gone? If you’re not sure or if you don’t feel comfortable with the answer, that’s a clear signal that it’s time to put your financial house in order.
After thinking about where your wealth will go according to your current arrangements, clear your mind and think about where you would like it to go. If you’ve been diligent about your estate planning, these two answers will be identical. If they’re not the same, you’ll need to make some changes or some new plans to ensure that your wealth will go where you want it to go after you die.
Taxes can eat up a significant portion of an estate if the estate isn’t planned carefully. If you’re interested in reducing taxes in estate planning, discuss the matter with your adviser. During your discussions, consider the following strategies.
Some people use trusts to reduce their tax burden, especially with regards to capital gains and income taxes. Trusts can also be used to provide for children with disabilities, making sure that assets pass to children if your surviving spouse marries again and even protect assets during a divorce of bankruptcy.
Another tax-reducing strategy is to seek legal advice about the structure of your estate. For example, if you own a family business, you may be able to structure your business in such a way that you can minimise the tax obligation on your estate.
Nothing sabotages an estate plan like the absence of a clear will. Key legal documents such as your will, testamentary trust, power of attorney and guardianship provide the framework for your estate. These documents help you to safeguard your assets and protect your family.
If you created a will when you were younger, you should re-evaluate it. Even if your goals and desires are the same now as they were then, your assets have probably changed. Additionally, you may need to make changes to your beneficiaries or executors.
We recommend reviewing your will yearly so that it’s always up to date. By scheduling a yearly review, you’ll have a regular time to review your goals, see if you’re on track and make any necessary changes.
For more information about estate planning, taxes, wills or other issues that affect your estate, get in touch with us at Altus Financial.