Putting an estate plan in place is so much more than saving taxes. It provides a roadmap for folks who want to better preserve, protect and transfer wealth to the people they care most about. Last year, the American Taxpayer Relief Act (ATRA), made permanent the gift and estate tax exemption amount. In 2013 that amount is $5,250,000 for individuals and $10,500,000 for married couples. But you don’t have to leave behind millions to still need careful planning.
Key takeaways to consider:
- Having an estate plan, including a will, generally means a family can avoid much of the intestate probate process. Proceedings vary state to state, but without a proper estate plan, many families could experience costs, including time, money, and loss of privacy.
- An appropriate solution designed to avoid any probate process is often the creation of a living trust, which helps maintain control over assets and seeks to avoid uncertainties for the family and designated beneficiaries.
Other important considerations:
- Designating guardianship for minor children and grandchildren will reduce the court’s control over both the minor’s inheritance and caretaker.
- Establishing a charitable plan as part of the estate plan ensures designated assets will be distributed to the charity of choice rather than by state law.
Finally, while an estate plan protects assets and family, it also provides the opportunity to pass on cherished values through gifts to family members or favorite charities. A written reflection of hopes for the future and life lessons learned can be conveyed through legacy letters and ethical wills. Putting an estate plan in place addresses legal and tax issues and ultimately ensures assets will be used according to your wishes.
Laurie Renchik, CFP®, MBA is a Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.
Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James. You should discuss any tax or legal matters with the appropriate professional.