Estate Planning is the process of determining how your wealth and assets should be transferred to the heirs of your choice: your children, grandchildren, friends, families, charitable causes, etc. and then deciding which legal tools and structures to use to best meet your estate planning goals.
Estate planning is not simply reducing or eliminating taxes and avoiding probate. Only after establishing how you want your estate’s assets to be distributed should you consider ways to reduce taxes and avoid probate. From there, good estate plans deal with a host of other issues. Now, with all but a few estates exempt from the federal estate tax, those other issues are, or should be, at the forefront of estate planning.
An estate plan is to ensure that you are taken care of the rest of your life and that your wealth is transferred to the people you want to have it. A good estate plan ensures these goals are accomplished with as much efficiency and as little cost as possible. An estate plan addresses the management and distribution of an individual’s property and financial obligations after he or she dies with financial tools such as wills, revocable living trusts and power of attorney.
For a comprehensive overview of Estate Planning, please start with our article:
When I was growing up in suburban northern Virginia, near our home in the midst of the developing sprawl was a large, untouched tract of land in a prime location. Despite the obvious money to be made in developing the land, it sat for a couple of decades. Throughout northern Virginia, similar tracts could be […]
I’ve never been a big fan of offshore trusts and other exotic strategies to protect your assets from lawsuits and creditors. They are expensive, you might have to deal with questionable people, and it is not even clear the strategies really work. Some recent cases show that these strategies don’t exactly build a rock-solid fortress. […]
It doesn’t take much to ruin a great estate plan. Many great plans, completed with careful work and good intentions, turn to disasters because of one simple decision – the wrong trustee was selected. Instead of being grateful that their parents and grandparents worked hard to provide for them, heirs become bitter and even resentful. […]
It’s time I had a talk with the business owners out there. The sad fact is that, even if you follow all the Estate Planning advice I give, few of those businesses will survive to benefit your children. And a scant few will benefit your grandchildren. But that doesn’t have to happen. Lack of preparation […]
A good solution to many Estate Planning and asset protection problems is a trust. In past visits I’ve told you about many different types of trusts and the problems they can solve. But what I haven’t focused on is where to set up your trust. This question is almost as important as the type of […]
You can get a discount of 30%, sometimes more, on estate and gift taxes by setting up a family limited partnership. That’s a tremendous discount. And the family limited partnership has advantages in addition to tax reduction. A strategy with so many benefits is bound to attract the IRS’s attention, and that has happened in […]