Estate Planning
Estate planning is the process by which an individual, arranges their affairs to provide for their potential incapacity or detah. There are many reasons to being this process:
- A proper estate plan can reduce the time it takes to fully probate one's estate, and, as such, assist in getting the needed money and assets out of the estate more quickly and into the hands of the beneficiaries. Additionally, it assists in the family in wrapping things up as quickly as possible and moving on with their lives so as to begin the healing process.
- Help minimize the Estate Tax. Currently, an Estate Tax is imposed at a rate of about 50%. Hence, assuming you died with $4,000,000.00 and no estate plan in place, it is quite likely that only $2,000,000.00 of this amount would ever make it to your beneficiaries. However, with proper planning, this can be avoided.
- Avoid potential planning hazards. For example, using the example above, let's say you leave that money to a grandchild. That tranfer will porbably be subject to Generation Skipping Tax ("GST"), at a rate of about 50%, in addition to the Estate Tax. Hence, only about $1,000,000.00 of your $4,000,000.00 may ever actually make it to that grandchild.
- A properly constructed estate plan can help shield your assets from potential creditors and preserve your wealth during your life, as well as at death.
- Provide for someone to be able to manage your affairs and make medical decisions for you if you should become incapacitated. All too often there is nothing in place to provide anyone with this power and, as a result, medical decisions are made for you by the doctors.
- You can provide for loved ones yet maintain control over your assets and how they are used so as to make sure your wealth is maximized.