By: Jim Dossey, MS, MBA, JD
There are countless reasons that estate planning is important, but some of the top reasons include:
- Avoiding chaos / discord among those left behind
- Minimizing estate taxes -- currently, the estate tax exemption is $5.43 Million. If the size of your estate approaches or exceeds that amount, you should consider planning to ensure your heirs do not get hit a 40% estate tax rate.
- Avoiding probate -- here in Texas, probate is not a painful or expensive process. However, if you have assets outside of Texas, you should consider trusts to avoid out-of-state probates.
- Protect children from mismanaging their inheritance -- sometimes "how" assets are inherited is just as important as "what" is inherited.
- Asset protection for beneficiaries -- through proper planning, you can ensure the assets you leave to your beneficiaries are creditor protected and sheltered from bad marriages.
- Business succession and exit planning
- Concerns about outliving their retirement
- Asset protection for self
- Providing for a spouse who is incapacitated or terminally ill
- Providing for a special needs family member
- Ensuring that philanthropic / charitable gifting goals are met
- Business formation and entity planning
- Coordination of beneficiary designations on life insurance and retirement plans with your estate plan
- Recent marriage / divorce or other change in personal life circumstances
- Disaffection, disability, or death of an executor or agent named in a previously executed estate planning document
- Changes in tax law. For example, any Will containing a Bypass Trust drafted before 2013 (aka credit shelter trust) should be looked at to see if that estate plan still makes sense. See my blog on this topic here.
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