Consider These 11 Reasons To Start Estate Planning | Part 2
Last week, we started out the year with things to get you thinking about doing your estate plan. You can check it out HERE.
This week we continue on the same path with a few more things that may help move estate planning to the top of your to-do list in 2021.
- Relieve Future Tensions Between Family Members
Unfortunately, inheriting money or even the expectation of inheriting money can create new tension and dynamics between family members that never existed before. Or worse yet, permanently sever family relationships.
If you’ve made gifts to some family members, you’ll want to document and account for those within the estate plan, even if it is to say you want an equal distribution despite those gifts.
Alternatively, if you want to disinherit certain individuals or treat beneficiaries equitably rather than equally, planning makes the process clearer. But even more importantly is effectively communicating your plans to all those family members.
- A Small Estate Needs Planning, Too
Regardless of your wealth, everyone needs to have powers of attorney in place as well as a Last Will and Testament and good beneficiary designations.
However, if you find yourself in a situation where you may not have sufficient assets to cover long-term care costs, you may need estate planning that incorporates elements of Medicaid planning to ensure you are able to qualify to those governmental benefits.
- Reduce Taxes
While you may not find yourself with more than $11.7 million to worry about a federal estate tax applying at your death, there are often income tax consequences to beneficiaries. As part of your estate plan it is important to do income tax planning (and financial planning) to avoid unexpected levels of income tax on your beneficiaries.
- You Poured More Than Money into Your Business
If you own your own business, it’s critical to consider estate planning that incorporates a business succession plan. Succession plans help to transition ownership and management to the next generation while realizing the value of your life’s work.
- Preserve the Family Retreat
Families who own vacation property or hunting land that want to ensure it continues as a family legacy need to develop an estate plan which transitions the ownership to the next generation smoothly. It’s important to discuss your plans with the next generation to make sure they want and value the property as you do. Not all family members may want a partial ownership so planning to avoid family disputes or a forced sale of the property is important.
- Your Life Changes. Your Estate Plan Should Too.
As life expands, so do the number of events that may trigger the need to update your estate plan or to create a plan. Changes in family status (divorce or remarriage), death of any individuals named in your estate plan, and changes to your state of residence are all moments that require recalibration.
Estate planning is not only about making sure you are taken care of, but it also helps make it easier for your loved ones to take care of you. So if you’ve been putting off doing (or updating) your estate plan and any of these have resonated with you, Annex is here to help. Head to annexwealth.com and click on the ‘Get Started’ button to find out more.