Estate planning is a task that is commonly put off until it is too late. Most don’t realize how important it is until they have witnessed or heard of the major issues that come along with not creating a plan. It’s messy, costly, and emotionally taxing. So it begs the question,

Why should you make an estate plan?

TAXES

“…in this world nothing can be said to be certain, except death and taxes” -Benjamin Franklin

Do you think because you’ve already paid taxes on most of your money already that the government won’t come for more? I hope not, because this one could catch you by surprise. Without proper planning your estate could end up having a chunk removed just from taxes alone. To name a few there are Federal estate tax, State estate tax, estate income tax, federal gift tax, inheritance tax, generation skipping tax, etc.

There are many vehicles available to help avoid such taxes which means your family, friends, charity, or even pets will be able to enjoy more of the assets you pass on.

Extra costs for administration

After you pass on there will have to be a team of people that have to organize, manage, and distribute your estate. If this isn’t planned out in advance, the state will handle this. The state is typically overwhelmed with this task and will try to get it done as quickly as possible, which means that a budget will be the least of the state’s concerns.

To save your estate some money, you should have a competent executor and estate planning attorney ready to administer your estate. These two individuals should know where all of your documents, passwords, keys, possessions, accounts, and other valuables are so they can organize, process, and distribute them based on your predetermined wishes. The less they know, the more time and money they will have to spend administering the estate. Failing to prepare is preparing to fail so make sure you’re all on the same page or you could be giving your executor more headaches than he or she bargained for.

Check out my executor checklist guide to see what the executor is responsible for during the estate administration process.

Protection

I’ve seen it a million times. Someone passes away and once the dust settles their assets are attacked like bears on honey. People claiming to be relatives who want a piece of the pie or businesses claiming to be owed money come out of the woodwork. If you didn’t sign all your beneficiary forms, complete a will or trust, or just give some form of directive, these predators could take your estate to court to get some of your assets. This is heartbreaking for family and could even tear the family apart. No matter how strong you think your family is, just think about the emotional stress they will be under after losing you and now having their livelihood attacked. Not where you want to leave them.

Work with an estate planning attorney or financial planner to get all of these considerations in order before your estate does more harm than good.

Control

Another not too rare occurrence is a transfer of estate assets to minors or spendthrifts. These beneficiaries are thought to not have the skill to properly handle large bequests, so there are protections put in the plan to help them make the inheritance last longer. Trusts can be formed to help with these situations. A trust document is a great way to fulfill the wishes of the deceased individual because they hire a trustee or trust manager to execute their wishes even after death. The trustee will take the responsibility to make sure the assets are managed and distributed based on the rules outlined in the trust document. This is the best way for you to remain in control of your hard-earned assets and make sure your beneficiaries are taken care of the way that you wanted: leaving your legacy intact and contributing to the family, friends, or charity for years to come.

Privacy

Without proper planning your assets could be exposed to the public eye. Probate is where the government takes assets of a deceased person and transfers ownership to another. This is a public process. There are many strategies to help avoid the probate process and make sure your assets have a clear line to the beneficiary thus negating the need for probate. Once again, a financial planner or estate planning attorney can help with these using wills, trusts, and other vehicles.

The best part is that in most cases, all of this can easily be managed with a few simple estate planning documents. Reducing your family’s pain while they are grieving might end up being one of the best gifts you can give them. Set up a call with Ryan Kaysen to learn more about this and hear how the simple solutions to what could be a complicated problem.

Check out how Integritas can help you with estate planning.

Fiduciary Mission

At Integritas Financial, we are committed to providing fee-only, fiduciary financial planning services that are tailored to the unique needs of young professionals, particularly millennials. Our experienced planners work with you to develop customized financial plans that address key areas such as estate planning, trusts and wills, retirement, workplace benefits, education funding, student debt, and buying a house.

We believe in transparent, client-focused service that puts your financial goals at the center of everything we do. As a fiduciary firm, we are dedicated to acting in your best interests, and we never sell products that charge commissions to clients.

Our goal is to help you achieve a stable and prosperous financial future by providing comprehensive financial planning services that are tailored to your individual needs. Whether you're just starting out in your career or you're already well-established, we can help you navigate the complexities of financial planning and create a roadmap for success.

Ryan@if-money.com