If you have any amount of real wealth at all – a home, a business, a bank account with more than a week’s pay in it – then you need to think about protecting and preserving it for your future and the well-being of your loved ones. For many people, that means writing out a will. But to truly protect and secure your interests and your assets, you need more than just a will. You need options that can help you to secure that wealth and properly distribute it to your heirs. An experienced estate planning attorney can help you to leverage these top estate planning techniques to accomplish those goals.
Revocable Trust
The revocable will is a powerful tool that can provide many critical benefits. It can secure an orderly transfer of assets when you die. It can provide continuity of decision-making during incapacity. It can even allow you to remain in control of your wealth while you’re alive. You can even continue to enjoy the use of those assets, while knowing that they’ll be passed on to your heirs when you pass away.
Life Insurance Trust
If you have a life insurance policy that could cause your estate to be eligible for estate tax assessment, a life insurance trust can be the perfect solution. This irrevocable trust can be listed as your designated beneficiary, which means that the money paid out by the policy goes to the trust when you die. That keeps it separate from your estate, which helps with your estate tax concerns. The IRS doesn’t count the irrevocable trust assets when determining your taxes, so that money can then be distributed to your heirs in accordance with the terms of the trust.
Family Limited Partnerships
When you want to keep your wealth in the family, but also want to minimize taxes and provide increased creditor protection, the family limited partnership option can be ideal. It offers the creditor protection you need while simplifying the asset transfer process. You can pass assets on to heirs in a way that minimizes those transfer taxes, while keeping management control of the limited partnership.
Financial Power of Attorney
If you don’t have a financial power of attorney, then you’re not prepared for incapacitation. The fact is that we’re all vulnerable to illness. Any of us can experience an injury. And we all age. Those three things can all potentially leave us in an incapacitated state where we can no longer manage our own financial affairs. When that happens, people without incapacity plans end up with court-appointed guardians handling their finances – and they end up paying for that privilege as well. Your power of attorney enables you to appoint your own attorney-in-fact, and eliminates the need for a guardian.
Advance Directive for Health Care
As you might expect, your health care decisions can also be impacted by incapacitation. You need a tool to protect you from guardianship there too. An advance directive for healthcare enables you to choose a healthcare proxy who can represent your interests, provide instructions to doctors and other medical personnel, and pass on information about your care instructions to staff. If you care about the treatment that you’ll receive, you’d better have one of these as part of your incapacity plan.
Business Succession Plan
If you died tomorrow, what would happen to your business? Do you have an heir who wants to take over operations when you’re gone? How will the disposition of your company affect your overall estate planning strategy? If you haven’t considered these questions, then it’s time to think about getting a business succession plan. This plan can help you to define the fate of your company when you die, and ensure that it ends up with the right heirs. You’ll also be saving your family from potential conflict in the future.
Charitable Remainder Trusts
Do you have a favorite charity? What happens to your charitable contributions when you die? Do they just stop? With a charitable remainder trust, you can create a way for your wealth to continue to benefit a charity even after you’re dead. The remainder trust allows you to receive regular income for a defined period, and then transfers the remaining assets to the charity. Everybody wins!
Annual Gift Tax Exclusion
If you’re concerned that the estate tax will consume too large a portion of that wealth you want to leave to your family, there’s something you can do about it. Use the annual gift tax exclusion to its fullest each year. This exclusion allows you to transfer a total of $14,000 to any given person each year, tax-free. Better yet, you can make similar transfers to an unlimited number of people. If you want to reduce the size of your estate and ensure that your wealth stays in the family, give it away before you die!
Medicaid Planning
Don’t underestimate the importance of having a long-term care plan. With nursing homes now costing thousands of dollars a month, chances are that you won’t be able to cover those costs on your own. Proper Medicaid planning can help you to shelter assets, provide for your loved ones, and secure the Medicaid eligibility that you’ll one day need to assist with your long-term care costs.
At Kulas & Crawford, we’ll work with you to evaluate your current needs and determine which of the top estate planning techniques will most effectively meet your needs. We can help to ensure that you have the most productive estate plan possible to provide asset protection, sound financial planning, and end-of-life planning that will safeguard your interests and your family’s future. To learn more about how state-of-the-art estate planning strategies can benefit you, contact us online or call us today at (772) 398-0720.
