Estate Planning

As you accumulate things in life, you develop an estate. It is comprised of the things that you own, and the debts you owe. Over the years of your lifetime your estate will grow. Hopefully you enjoy a full life, acquire real estate and other assets, and maintain your health. But at some time we all must die. And when that time comes, your estate passes to others. You can’t take it with you, but you can decide how it should be left behind.

It’s important to make a few conscious decisions when it comes to estate planning. Do you have any personal property that is near and dear to your heart? These sentimental things may mean more to heirs than the hard money. They may be treasured family heirlooms. It’s nice when those assets end up with the family member that will be a good steward of it. Think about it and write it down. Not all of your wishes need to end up in your will and estate plan. Take a moment and search your heart for the things you have that mean a lot to you, and who would get them if you were to die today. It’s a good exercise to help you discover what you have that you value.

Then it becomes about the money. Will you spend it all during your lifetime or will there be any “leftovers”? If you have wealth left, where should it end up? Is it important to you that any wealth you accumulate during your lifetime, pass down your bloodline after your death, or the death of your spouse? You have the ability to make choices today that will determine how events will happen in the future. The use of trusts to plan estates was a tool of the wealthy and educated for many years. Now with more people accumulating estates, many sophisticated planning tools can be utilized by all of us. It’s a way to plan for the future.

When you understand the Estate and Gift Tax system, it may become obvious that a little planning today is worth saving significant tax dollars in the future. The use of trusts can reduce estate taxes as assets pass from one generation to the next. The trust also helps deal with capacity issues and avoids the probate process. It can be a private way to manage and dispose of an estate. Charitable trusts have special uses that can reduce taxes. A good financial advisor can review your balance sheet with you and discuss options available to you for estate planning.

When you have a Family Living Trust you feel like there is a “family corporation”. It helps you plan in a marriage. It helps address and plan for the many “what if” scenarios that life presents. It becomes an important part of what I call “The We Thing”. That is when a couple comes together to build their lives on a foundation of values, character and integrity. They realize their dreams together.

When you build an estate you accumulate assets. How those assets are titled is important. Title affects who the property passes to at death. It can have significant income and estate tax ramifications. Proper ownership of your assets is an important step in playing the “Money Game” well.

The word “probate” means “to prove”, and when title is unclear at death, the probate process clears title to assets and helps bring closure to an estate. When you leave assets by will they may become involved in the probate process. Seek advice from your lawyer and your tax advisor when you make decisions about your estate plan. Talk with a financial planner. It may be some of the most important planning you do in your life!


Next — Goal Setting

Scroll to Top