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Why Estate Planning is So Important

Posted By Harrison & Mechlenberg, Inc || 10-Oct-2014

Estate planning is for everybody, not just those with extensive assets. This legal tool is a key part of planning for your retirement and future generations. Since many people are unaware of all that estate planning encompasses, they put it off until it is too late. Once you understand what estate planning entails, you will want to begin your own right away.

Estate planning can involve the following issues:

  • Ensuring your assets go to the people you choose once after you pass away
  • Whether you want to eliminate or reduce needless loss of your assets when you need long-term care
  • How much input you want to have on your healthcare if you were to become incapacitated
  • Minimizing excessive taxes on what you want to give to your beneficiaries
  • Preventing public exposure, costs, and delays due to probate
  • Avoiding disputes and arguments over inheritance

How you address these issues can have enormous ramifications later in life. An estate planning attorney can go over all of them and advise you on the best legal course of action for your needs.

An Estate Planning Lawyer can Address Your Concerns

Everyone needs a will.
A will tells people just where you want your assets to go when you die. You can also name guardians for your children. Dying without a will, known as dying intestate, can cost your heirs and you will have no say over how your assets are distributed.

Trusts are for everybody.
Trusts are a legal means of putting conditions on how and when your assets may be distributed after you die. Trusts allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay, and publicity of probate court, which handles wills. Some trusts also offer greater protection of your assets from creditors and lawsuits.

Leaving all of your tax-free money to your spouse is possible, but not always a good idea.
If you leave all your assets to your spouse, you can't use your estate tax exemption and instead increase your spouse's taxable estate. This means your children will likely pay more in estate taxes if your spouse leaves them the money when your spouse dies. In addition, it defers the tough decisions about the distribution of your assets until your spouse's death.

There are two way to give tax-free gifts and reduce your estate.
You are allowed to give up to $14,000 annually to a person, or $28,000 if you are married and giving the gift with your spouse. You can also pay an unlimited amount of medical and education bills for someone if you pay the expenses directly to the institutions when they were incurred.

Giving charitable gifts that keep on giving.
If you donate to a charitable gift fund or foundation, your investment grows without being taxed and you can select the charities to which contributions are given both before and after you die.

An estate planning attorney from Harrison & Mecklenberg, Inc. can help you with any estate planning questions you may have.