If you have stuff, you have an estate. Learn how advance planning protects your family, your business and your legacy.
You don’t have to be a Wall Street mogul to have an estate. Your estate is simply the sum total of all the stuff you own, from your hairdryer to your home. Advance planning is the most reliable way to make sure that, after your death, your stuff goes where you want it to go, whether to family, friends or charity. Estate planning provides you and your heirs with a number of key benefits.
1. Protecting Your Legacy
If you have not put a will and estate plan into place, the law and the courts will decide how to distribute your assets after your death. On the other hand, if you officially document your wishes in a will, you have control over what happens to your assets and belongings.
2. Protecting Underage or Disabled Children
As parents, you and your spouse have the right to make the decision about who raises your children if you die before they are grown up, but only if you make it official as part of your estate plan. Designating a legal guardian helps to ensure that your children’s future is secure when you can’t be there.
3. Minimizing Expenses
Even if your estate is exempt from federal taxes, you can still minimize other expenses by having a plan in place. For example, your estate could be subject to a state death tax. Also, if you die without a will, your heirs face hefty legal fees for attorneys to represent their interests in probate court.
4. Better for a Business
If you own a business, estate planning is often the most effective means of ensuring its survival after your death. Handing over the reins to your business before you die helps the new owner bypass a substantial estate tax that reduces the firm’s worth. Also, if you sell to someone qualified to run the firm in your absence, it will be more likely to endure in the future. In addition, you should consider business succession planning to avoid probate.
5. Income Tax Savings
When you die, your estate must pay your income tax for the current year. If you haven’t planned ahead, your heirs will be liable for paying the tax on the value of your standard IRA and/or 401k plan. However, an estate planner can advise you on how to protect your heirs from these income-related taxes by converting those accounts prior to your death. That way, your heirs can enjoy the full value of the money you have set aside.
We Can Help You Plan Your Estate
At McLane & McLane in Agawam, Mass. we can help you create a comprehensive, legally binding estate plan and make updates as your life changes. We are happy to answer your questions and work with you to protect your best interests and those of your future heirs. Contact us today for further information.
