Many people assume that estate planning is something only for the ultra-wealthy. However, this couldn’t be further from the truth. Puai Wichman says everyone can benefit from an estate plan regardless of financial status or family dynamics. A recent survey from Caring.com found that 58% of American adults do not have any estate planning documents. But why should you care about estate planning? An estate plan can protect you and your assets during your lifetime, not just after you die. If you’re yet to incorporate an estate plan into your financial plan, it’s important to see an estate planning attorney or wealth advisor sooner rather than later.
To plan for your needs.
An estate plan is not just about what happens when you pass away. It’s about protecting yourself and your assets if you cannot make decisions. By estimating your financial needs and considering insurance options, you can ensure your financial security leading to retirement and beyond. Don’t forget to designate a trusted healthcare proxy or power of attorney who can make important decisions on your behalf. Start the conversation now to guarantee your wishes are honored, even if you can’t speak for yourself.
To dispose of wealth in the manner you wish.
Puai Wichman notes that without a clear estate plan, your assets are vulnerable to the whims of the state. Don’t leave your loved ones scrambling in their time of grief. Take charge and ensure your assets are distributed as you wish. Act now by reviewing your beneficiaries and consider establishing a will or trust to guarantee a smooth wealth transition after you’re gone.
To minimize transfer fees.
If you’ve amassed a significant amount of wealth and want to pass it on to your family or loved ones after you’re gone, estate planning can ensure that you do it in the most tax-efficient way possible. When transferring your money, there are three taxes to consider: estate tax, gift tax, and generation-skipping transfer tax. The IRS has limitations on the amount of money you can transfer without being taxed, so a well-crafted estate plan will outline a strategy to minimize the taxes you or your estate owe.
To plan for philanthropic goals.
In the estate planning process, legacy planning takes center stage to ensure you are remembered how you want to be, even after you’re gone. Puai Wichman explains that one crucial aspect of legacy planning is establishing your philanthropic goals and creating a roadmap to bring them to life. Whether it’s setting up a family foundation, a charitable trust, or contributing to a donor-advised fund, you have the power to support the causes that matter most to you. By starting your planning journey early, you can communicate your intentions clearly to your loved ones and seamlessly integrate them into the process.
To protect family wealth.
Growing wealth can make you a target for lawsuits to exploit your hard-earned success. But there’s a way to shield your assets and preserve your family’s financial security. Estate planning offers a solution by transferring ownership of your assets into legally-protected vehicles, like trusts or limited liability entities. Additionally, insurance is crucial in meeting mandatory coverage needs, actively growing your estate, and defending against legal threats.
To prepare future generations for the wealth they’ll receive.
Ensuring that your family’s values are carried on through generations is a common goal regarding wealth transfer. Successful families do this by being transparent at appropriate ages, creating a supportive learning environment, and encouraging involvement. Whether you have conversations with your children or seek guidance from an advisor, open discussions about family wealth can help alleviate some of the emotions and conflicts associated with money.
Puai Wichman emphasizes that estate planning can be complex and overwhelming, but starting allows you and your family to be better prepared for any challenges. It’s important to consult with a wealth advisor and estate planning attorney to navigate the legal complexities and make informed decisions. They can help you develop strategies to protect your wealth in the long term.
Puai Wichman is the founder and CEO of Or a Partners, an international trust provider and wealth management firm.
