You don’t have to be a John D. Rockefeller or a Conrad N. Hilton to benefit from estate planning. Every high-income earner and high net-worth individual amasses assets – home, stocks, shares, business interest, retirement plans, permanent insurance policies, annuities, IRAs and much more.
Without estate planning, a portion of these assets could be lost to estate taxes. In 2019, a top federal gift and estate tax of 40% is imposed on transfers in excess of $11,400,100. In 2018, the exemption is doubled from $5.5 million to $11.18 million per taxpayer due to the Tax Cuts and Jobs Act of 2017.
Even the rich and the famous have lost more than half their estate, due higher rates, lack of proper planning and the best advice! Some of those rich and famous include:
Estate planning is also an important part of preparation for the future protection of your family, by protecting your assets after you pass on. It’s a subject that is often avoided because of the negative connotations, but it is a subject that families with wealth need to pay some attention to.
Many people only think about estate planning as they approach retirement age. It is important though to look at estate planning much earlier. How soon? As soon as you start earning decent money, acquiring sizable assets, and certainly when you start a family; you need to begin to plan ahead to prepare for the inevitable. Death is inevitable and estate planning plays an important part in relieving your loved ones of difficult decisions during their grief.
Estate Planning is a list of instructions that YOU prepare as to how you want your assets to be divided after your death.
The list of instructions about your estate forms part of your last will and will be used as the foundation for the executors of your estate when you pass on. The list of instructions will cover all of your assets and can be a complicated legal document, especially when it comes to estate taxes and money that may be due to the federal government by your heirs. Your estate planning takes care of all of that.
Just because you have a will and think you’ve taken care of your assets doesn’t mean that your estate can avoid the process of probate, or the process of verifying your will. When you die, your estate has to go through probate at a state level. If you own real property, in two states, you will face probate in each state. While it might seem like a legal and financial nightmare, the laws are actually there to ensure that everyone (including the government and IRS) gets what is due to them. Using a professional to prepare your estate ensures that this happens. Probate is open to the public and can take anywhere from few months to many years depending on the court system and how well you did your estate planning before your passing.
A revocable living trust can help you avoid lengthy probate in your state. It provides for a set of instructions that you can change. It ensures your privacy and helps to ensure that your wishes are carried out exactly. Estate planning also helps to organize your financial affairs. Something as simple as having your title deeds, bank account details and copies of all investments held in your living trust can save your beneficiaries and loved ones do not have to try and find them after your passing.
All of your life insurance policies will provide for your family immediately upon your passing. You will want your family to have immediate access to funds for funeral planning and monthly expenses. Remember that your estate is not only a set of instructions about what happens after your death, but can also be used if you become ill or incapacitated for any reason. Your estate speaks for you when you are no longer able to speak for yourself. Your estate deals with guardianship of minor children, trusts and income for minor children and who will be in control of their money until they come of age. It can provide care instructions for members of family who have special needs as well as being an important document if you run your own business or are a professional such as a doctor, dentists or lawyer.
We have helped many successful individuals to create smart estate plan. If this something you want for yourself then please call (877) 972-3262 or complete contact us form now.