5 Estate Planning Tools
It’s amazing, but there are millions of Americans who do not have their estate plans in order. Some think that a simple will is an estate plan. That is not the case. If you have any amount of wealth (especially if you have a spouse and/or children), you really need to have each of the following estate planning tools. The center column is the average number of people out of ten who do not have each tool.
|Estate Planning Tool:||People WITHOUT||Why you want this…|
|Will||1-2||Without it…• The state decides who gets your assets at death
• The state decides who gets custody of your minor children
|Marital Trusts||5-6||In general, to save on estate expenses…• by maximizing estate tax exemptions
• avoid costly probate (up to 4-10% of the entire estate)
• protects certain assets from the government as a set off for long term care expenses
|Irrevocable Life Insurance (ILIT)||7-8||Life Insurance proceeds pass to the beneficiaries free of income tax and free of estate tax.|
|Durable Power of Attorney (DPA)||5-6||–Legal powers allow someone to act on your behalf when you become incapacitated (to pay bills, remove money from IRAs, sell stocks, etc).-Medical powers allow someone to make decisions about your healthcare (such as make end-of-life decisions and whether life support should be continued or a feeding tube removed).|
|Family Limited Partnership (FLP)||9-10||FLPs help to protect assets from creditors and to help reduce gift and estate taxes when transferring assets to family members.|
The above mentioned tools are the basic ones that most clients with any of amount of significant wealth should have. If your estate plan doesn’t incorporate these tools, the chances are significant that it is incomplete (which means you could be leaving your assets vulnerable to probate costs, estate taxes, legal proceedings, and more).
If your estate plan is not in order and you would like help from our firm and its affiliate partners, please feel free to contact us at [email protected] or 269-216-9978.