Why is Estate Planning Important?
- Provide protection for you during your lifetime. Having a durable power of attorney, living will and healthcare proxy help provide protection if you are to become incapacitated or unable to make financial, legal or medical decisions yourself.
- Distribute wealth in accordance with your wishes. Without a will or trust, assets are distributed according to state law and may not align with your intentions
- Select responsible individuals to carry out your wishes. Having a plan in plan allows you to designate a guardian for minor children, trustee (manages assets within trust), and executor (handles the settlement of an estate).
- Minimize transfer taxes and expenses. Proper use of trusts and titling of assets can help mitigate tax implications and estate administration expenses
- Philanthropic legacy. Have philanthropic goals? Incorporate charitable causes within your estate plan as a way to leave your legacy.
- Protect family wealth. Asset protection trusts and pre-nuptial agreements may help protect assets from litigation liability, creditors and divorce.
- Prepare the next generation. Facilitate dialog and understanding within the family and stewardship for the future.
Guide to Estate Planning – 3 Levels
Level One: Must Haves
The first level of estate planning covers the basics. Start by planning for the transfer of assets with minimized tax and transfer cost. Review and update your plan upon major life events (marriage, divorce, birth, adoption, etc.). This stage involves the following documents:
- Will
- Living Trust
- Healthcare Power of Attorney
- Financial / Property Power of Attorney
- Proper titling of accounts and asset ownership
- Beneficiary designations for IRAs, Life insurance and Annuities
Level Two: Considerations
Further enhance the direction of assets, minimize Estate Taxes or increase Asset Protection in the second level of estate planning, which often involves the following:
- Spousal Lifetime Access Trust (SLAT)
- Grantor Retained Annuity Trusts (GRAT)
- Charitable Trusts, Private Foundation or Donor-Advised Fund
- Irrevocable Life Insurance Trust (ILIT)
- Qualified Personal Residence Trust (QPRT)
- Intra-Family Loans
- Special Needs Trusts
With all of the options out there, it can be hard to choose which trust is best for you. Refer to our blog, “Which Trust Is Best for You?” for a more detailed guide on the various types of trusts and the pros and cons of each.
Level Three: Advanced
For Complex Estate Tax Issues or Liability Concerns, consider incorporating the following into your estate plan:
- Domestic and Offshore Asset Protection Trusts
- Self-Cancelling Notes
- Family Limited Partnerships and Family LLCs
Put your mind at east by having an estate plan in place. Trust Point’s trust administration and estate services can help you feel confident knowing your wealth will have a lasting impact. Trusts have been the bedrock of our business for over 100 years – we are here to help ensure your goals and wishes are met. Give us a call at 800-658-9474 or fill out our online contact us form if you’d like to see how we can help you create a plan to leave your legacy.
