Why you need an Estate Plan even if you don’t live in a mansion…
As a standard part of the comprehensive, Personal Financial Planning process, we will eventually come to the topic of estate planning. Often the client (and/or their spouse) will get visibly uncomfortable, fidgeting in their chair, avoiding eye contact, etc. An older friend of mine once explained why this was the case for him. “Johnny, you are asking about the two things I DO NOT want to talk about; MY death, and MY money” Now, I don’t know anyone that relishes thinking about their eventual demise, but if the worst happens, most people also want to make sure their family is taken care of, and avoids squabbles over children, money, or their various assets, including life insurance proceeds.
Many people assume that estate planning is only about saving estate taxes. Consequently, they often ignore estate planning because they assume that their estate is too small to be taxed. Families may also assume that because Congress has reduced federal estate taxes—and may permanently eliminate them—they either don't need a formal estate plan or they can delay work on one. Regardless of what Congress ultimately decides regarding federal estate taxes, many estates—even modest-sized ones—will remain vulnerable to state inheritance and estate taxes.
But the main reason that everyone needs an estate plan is much more than about taxes. It covers who takes care of the children, and allows a person to decide who will inherit what, when, and under what conditions/stipulations. For example, many clients have trusts set up so they can ensure the children’s college fund is used for higher education, not a lavish lifestyle for their young adult children, or other family members. Additional benefits include:
· Making sure your assets go where you want them to go
· Providing provisions for a guardian of minor children
· Controlling assets while you are alive but incapacitated
· Controlling assets after death
· Minimizing the emotional and financial burden on your heirs
· Minimizing feuding among heirs over your estate
· Increasing the amount available for charitable donations
· Avoiding the cost and delay of probate
John A. Davidson, CPA, CFP®
Kyleshill Group, LLC
john@kyleshill.com
614-395-1295
Many people assume that estate planning is only about saving estate taxes. Consequently, they often ignore estate planning because they assume that their estate is too small to be taxed. Families may also assume that because Congress has reduced federal estate taxes—and may permanently eliminate them—they either don't need a formal estate plan or they can delay work on one. Regardless of what Congress ultimately decides regarding federal estate taxes, many estates—even modest-sized ones—will remain vulnerable to state inheritance and estate taxes.
But the main reason that everyone needs an estate plan is much more than about taxes. It covers who takes care of the children, and allows a person to decide who will inherit what, when, and under what conditions/stipulations. For example, many clients have trusts set up so they can ensure the children’s college fund is used for higher education, not a lavish lifestyle for their young adult children, or other family members. Additional benefits include:
· Making sure your assets go where you want them to go
· Providing provisions for a guardian of minor children
· Controlling assets while you are alive but incapacitated
· Controlling assets after death
· Minimizing the emotional and financial burden on your heirs
· Minimizing feuding among heirs over your estate
· Increasing the amount available for charitable donations
· Avoiding the cost and delay of probate
John A. Davidson, CPA, CFP®
Kyleshill Group, LLC
john@kyleshill.com
614-395-1295