As the Summer Savings series continues, I thought we could look at something that most people don’t like to address in the first place, and no one really considers a “money saver.” Of course, I’m talking about having an estate plan.
Many people see the cost of working with an attorney on an estate plan as an expense rather than a savings. In reality, a thoughtful estate plan can save your loved ones significant money later by helping them avoid unnecessary probate costs, court fees, delays and administrative expenses during an already difficult time.
Moreover, if you fail to plan you are likely leaving your legacy to the default rules of your state’s law. If you’re charitably inclined your legacy will not be met. If you want to control how assets are passed, and control who they are passed to, failing to plan will sacrifice those goals. Even worse, if your beneficiaries feel your intent was something other than the default rules, litigation may ensue. At that point, the legal fees typically vastly exceed the costs of proactively implementing an estate plan.
And what happens at your death isn’t the only concern. If you fail to plan for your incapacity the costs can be extreme. Most likely a court-appointed guardian and conservator will be needed, again creating ongoing court and legal fees. Not to mention you don’t get to decide who will be making financial and caretaker decisions for you if you do not proactively name powers of attorney to act on your behalf.
So, what should you do? If you don’t have a plan currently, you need to get something in place. A good place to start is to review your assets and liabilities, and how your assets are titled (individual name, joint, etc.) What are your legacy goals? Do you intend to leave a certain amount of assets to
your beneficiaries, or is your goal to live comfortably with your beneficiaries receiving whatever is left? From there you can work with an estate planning attorney to implement the best plan that meets your goals.
If you have a plan in place, when is the last time you reviewed your plan? Have there been changes in your life or the life of your beneficiaries, like a birth, death, marriage or divorce? Depending on your net worth, are you aware of the recent change in federal estate tax law allowing for up to $15 million to pass estate tax free? Or, do you live in a state that has a state estate or inheritance tax? You should consider reviewing your current plan to make sure your legacy goals are being met in the most efficient manner possible.
Incapacity and death are never fun topics, but unfortunately they touch all of our lives. By planning ahead, you can help protect your loved ones from avoidable costs, delays and stress while preserving more of your estate for those you intend to benefit. Collaborate with your Benjamin F. Edwards advisor, along with your tax and legal professionals, to make sure your estate plan is structured to support both your future well-being and your legacy goals. Sometimes the costs are worth the benefits!
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.