Estate Planning is Not All About the Estate Tax

When most people hear about estate planning, they may remember the $11 million estate tax limit and figure it is irrelevant for their situation.  However, estate planning is not only for ultra-high net worth families.  Careful consideration and planning are important for all individuals and families with handling their end of life legacies.  Here are three scenarios where planning would help insure your estate goals such as protecting privacy, minimizing costs and taxes and ensuring assets are going to the intended beneficiaries.


First of all, the probate process is very public.  A quick search in county records of a deceased person’s name, like this, will pull up court filings with assets, motions and rulings.  This public disclosure can be avoided with the use of a revocable living trust and a pour-over trust.  Proper titling of assets and updating your account beneficiaries can also be helpful.


Another example covers instances when families own property in another state, as the probate process is not limited to the state of your residence.  In fact, there will be probate in each state where the decendent owned property with all the associated court costs and hassles.   Careful titling of the property can avoid this by using a trust vehicle or “joint tenants with right of survivorship.”


The last example is settling an estate with a family-owned business.  In these instances, there are several tricky problems that can arise.  For example, how do you split the ownership if only one of the children is involved in running the business. It may make splitting assets easier to leave the business to that child and then have a live insurance policy that benefits the other children that equalizes the value. Another way that life insurance may help is if much of the assets of the decedent is tied up in the business. Any estate taxes or other cash needs can be handled without having to sell some, or all, of the business.


Your estate planning needs evolve over time.  While no substitute for an estate attorney in drafting wills and setting up trusts, a trusted advisor who understands the changes in your life can help navigate some of these issues and recognize when a lawyer is needed.




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