When you’re ready to get started organizing your Last Will and Testament, however, you may want to bring both your trusted financial advisor and estate attorney together. Combined they can help you to formulate a plan that seeks to preserve your wealth, reduces your tax burden and establishes a mix of investments, trusts, and insurance strategies to help secure your family’s future.
Why Initiate Estate Planning?
Let’s face it. No one knows what tomorrow may bring. Many of us become involved in unfortunate accidents or health circumstances that can abruptly interrupt our lives. And, as we age, the probability of life-ending occurrences naturally increases.
So, if something should happen to you, how would you want your assets to be divided? Would your loved ones receive the same level of support you were able to provide while you were alive?
Note that estate planning is not only essential for when you are gone. Your plan can also protect you and your assets if you should become incapacitated, even if only temporarily. The details may include specific powers-of-attorney or healthcare directives that instruct during your incapacitation.
Your financial advisor and estate planning attorney can help set up an estate plan that continues to manage your assets as you instruct even when you are unable.
Five Important Reasons for a Comprehensive Estate Plan
Here are 5 reasons a well-developed estate plan can help you secure the future of your loved ones and provide you with greater peace of mind:
1. Designate the Distribution of Your Assets
Without an estate plan and will, assets not already shared with a co-owner (such as a spouse) or accounts with a payable-on-death (POD) designation must pass through the court-mandated probate process. Without an estate plan or adequately executed will, probate courts distribute in conjunction with pre-established guidelines that may not agree with your actual preferences.
Estate planning establishes who should receive what. And, while you are still living, you can update the document at any time to address changes that may occur.
2. Protect Family Wealth
Estate planning should be targeted toward protecting your total assets. Individuals can continue to maintain family wealth and avoid the probate process if you transfer assets into a revocable trust while you are still living. You can make changes to these at any time.
According to Forbes, you may want to also consider various types of insurance policies that protect and even enhance your estate’s worth.
3. Minimize the Tax Burden
The heirs of high net worth individuals can be subject to certain taxes when they inherit. Gifts, generation-skipping transfers, and estates are taxable at certain levels. Your financial and tax advisors can show you how to minimize the tax burdens through strategic estate planning.
4. Provide for Special Needs Beneficiaries
Sometimes a member of the household requires extra support and care to maintain a decent quality of life. While many issues surround who, how, and how much special needs care this may involve, your estate planning strategy can include financial instruments like a Special Needs Trust. With this type of trust, you can ensure your disabled or injured child, or another person receives the lifetime of care you want, without jeopardizing Medicaid and Social Security support.
5. Plan for Philanthropic Gifts
Charities, universities, and other institutions depend mainly on donated funds. If you feel compelled to contribute to a specific cause, your BD Financial Concepts advisor can work with you to help guide you in setting up a family foundation or charitable trust during your estate planning session that can secure the legacy as you wish to leave.
Experience the Expertise of BD Financial Concepts
Serving clients throughout Central Florida with time-tested strategies and trusted relations, BD Financial Concepts offers personalized financial planning for every stage of life. For a complimentary consultation, contact us today.