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Securing Your Legacy: Estate Planning Essentials

Securing Your Legacy: Estate Planning Essentials

May 07, 2024

A big part of a successful financial planning strategy is ensuring your estate is passed on as you intended in a way that protects your assets and your loved ones’ financial future. Proper estate planning has several advantages, such as ensuring your assets are distributed according to your wishes, minimizing taxes, and providing peace of mind.

As a financial advisor, I've witnessed the benefits of a well-crafted estate plan and have helped numerous families create a legacy that suits their goals and helps their loved ones. However, 67% of Americans don’t have an estate plan in place1. Whether you currently have an estate plan or it’s on your “to-do” list to complete, here are some essentials to consider.

Will and Trusts: Most estate plans start with making sure you have your wishes documented. A will outlines how you want your assets distributed after your passing which can be completed with the help of a financial advisor and an estate attorney.

Another popular estate strategy that may work in some scenarios is creating trusts. Trusts can complement a will by providing specific asset management and distribution instructions and options for taxation and other benefits. We can help you determine what you need for your situation, and to the extent an attorney is necessary, we will recommend some of our trusted partners. 

Power of Attorney (POA) : Speaking of attorneys, designating someone to handle your financial and medical affairs if you become incapacitated is very important to include in your plan. While this may not be a fun topic to think about, it’s essential to have these individuals established and for them to be aware of the responsibility.

For example, say you have two adult children. In some families, the parents might name one child the power of attorney for medical care and related decisions, while the other adult child is the power of attorney for financial matters. However you choose to divvy the responsibility, assigning a POA ensures that decisions are made according to your wishes.

Beneficiary Designations: You are likely aware from setting up retirement or insurance accounts that it’s important to name beneficiaries for your accounts in case something happens to you. Remember to regularly review and update beneficiary designations on retirement accounts, life insurance policies, and other accounts, especially as your beneficiaries age, have children, and experience life changes. These designations override instructions in a will or trust, so you’ll want to make sure they are consistent with your wishes.

Estate Taxes: Estate taxes are currently a big topic of conversation as the provisions put forth by the Tax Cuts and Jobs Act of 2017 expire at the end of 2025. We help clients employ many tax-intelligent strategies to minimize estate taxes and adjust them if needs or tax laws change. By partnering with a tax-savvy team and using strategic planning, you can help preserve more of your estate for your beneficiaries. You can find more information from the IRS here, and we can also help review the anticipated changes.

Family Meetings: One often overlooked but essential aspect of estate planning is communication. Hosting family meetings can facilitate discussions about your wishes, reduce potential conflicts, and ensure everyone is on the same page. As a financial advisor, I can help facilitate these discussions if desired, providing guidance and expertise to navigate sensitive topics or simply a meeting space for you to discuss with your loved ones.

Regular Reviews: Life changes, such as marriages, births, divorces, or significant financial changes, should prompt a review of your estate plan. Regular updates ensure that your plan aligns with your current circumstances and goals.

Remember, estate planning is not just about protecting your assets; it's about securing your legacy and providing for your loved ones. By taking proactive steps now, you can ensure that your wishes are fulfilled and your family is provided for in the future.

As your home for tax-intelligent financial solutions, we’re here to guide you through the estate planning process, answer your questions, and help you make informed decisions that protect what matters most to you and your family. Contact us today to get started on securing your legacy.

1CNBC.com, 2022