Is Your Estate Plan Up-to-Date?

May 24, 2023
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Whether you are ultra-rich or just have some wealth and important assets worth protecting, you need an estate plan. Too many people and their families fall victim to poor estate planning each and every year. You want to make sure your money and important assets are passed on to your heirs as you wish. In addition, critical tax strategies need to be implemented as a central part of your estate plan.

Key Estate Planning Considerations

Federal estate taxes can be costly and complicated, so you want to take the necessary steps now to protect your family in the future. If you don’t have a will, state law will dictate the distribution of your assets. Your heirs may have no control over the situation if all the proper legal and financial documentation is not in place. You will also want to name a guardian to care for any minor children in the event of your untimely passing. These are just some of the key considerations to cover when creating a successful estate plan.

Living Trusts

You may also want to think about establishing a living trust. This can help your heirs avoid probate, which can be an expensive and time-consuming legal process. A living trust enables you to transfer legal ownership of your assets to the trust. This ensures your beneficiaries will receive the assets without having to go through the painful probate process. A living trust can also be amended as personal circumstances change, thus giving you full control over your financial assets.

Tax Planning

It is also important to keep your beneficiary designations current. Ultimately, these will take precedence over wills or living trusts when it comes to asset distribution. Finally, you have to consider the tax consequences of your estate plan. Some estates will suffer from federal or state death taxes. You will want to take every step possible to minimize your tax exposure and protect your heirs from excess taxation.

Keeping Your Estate Plan Current

Estate planning is not a one-time event. You do have to start somewhere, but it should be an ever-evolving process. You will want to review and revise your estate plan on a regular basis. Keep it up-to-date based on current tax laws, family situations and other potential life changes that often happen. An annual estate plan review is recommended for the best results.

To get started with your estate plan or to review and revise your current plan as needed, please contact the team at Illumination Wealth today.