Estate planning to secure the legacy you’ve built.
It can be easy to overlook estate planning because it addresses tough issues like what unfolds if you’re incapacitated or when you die. But it’s vital.
What is estate planning exactly, and how does it compare to a will? The will is only one part of an estate plan. An estate plan not only deals with asset distribution and succession desires but also saves you and your heirs' money on taxation, charges, and legal bills. For the high-net-worth individual, estate planning preserves your hard-earned wealth, allowing you to create a legacy for generations to come.
What is Estate Planning?
Estate planning is how you prepare for your assets to be handled when you die or if you become incapacitated while living. Transferring investments, cash, and possessions to your chosen successors and settling estate taxes are all part of the preparation.
Properties, automobiles, equities, art, life insurance, pension, and debt are some assets that make up a person's estate. People create estates for a variety of purposes, including maintaining family money, caring for a deceased spouse and kids, supporting children's or kids' and grandkids' schooling, or establishing a philanthropic contribution.
Why Do You Need to Plan Your Estate?
Safeguard your family's possessions
An estate plan is a compilation of legally bound documents that help to reduce distribution timeframes, guarantee that your desired wishes are carried out, and can create asset protection for you and your heirs while also minimizing taxation
Choose who makes decisions
As part of an estate plan, you’ll decide who receives power of attorney and who carries you’re your healthcare wishes. If you become incapacitated, the power of attorney allows a trustworthy individual, like a spouse or other relative, to handle your financial and legal matters on your behalf in your absence. If you cannot make medical decisions for yourself, a healthcare proxy allows someone else to do so based on your wishes. Without these important documents, your loved ones are left to guess what you’d want to happen.
Choose who receives your assets
In addition to determining who makes decisions on your behalf, estate planning ensures your assets go to the people or entities of your choosing when you pass away. While it’s most common to leave assets to family members, you may also bequeath them to charities or faith-based organizations. There are several ways to pass down assets, and we’ll look at which ones are most effective for your beneficiaries. This is your legacy. We’ll want to preserve as much of it as possible.
Avoid probate
The act of certifying a bereaved individual's will, valuing their possessions, settling their remaining debts and obligations, and dispersing the rest to their successors is known as probate. Ideally, we want to avoid probate because it can cause strife amongst your loved ones.
Reduce estate taxes
Federal and state estate taxes or state inheritances may be your number one reason for creating an estate plan. Taxes can significantly reduce the wealth you leave behind. You can minimize or perhaps erase estate taxes for your spouse by including AB Trusts or ABC Trusts in a will or renewable life trusts. Both married and single individuals can use a range of innovative estate planning tactics to reduce or eliminate the estate or inheritance tax liabilities. Because Capstone considers tax implications in all of our recommendations, you’ll receive the guidance that works best on your behalf.
Protect beneficiaries
The main reason for creating estate measures is to defend your loved ones. Without a plan in place, your entire estate is left vulnerable.
If you have young children, an estate plan assigns a guardian or conservator to handle their requirements and funds until they reach the age of legal adulthood, which varies based on where the child lives.
You can also develop an estate plan that safeguards the heir when there’s reason to do so.
When leaving assets to an organization, an estate plan makes sure we do so without adding any additional tax liabilities or legal concerns.
Charitable Giving Options
If you have the desire to give back to your community or charities, you’ll want to ensure you’ve defined your values and answered your concerns.
Philanthropic decisions require a thorough analysis of your entire financial framework. For this reason, we offer dedicated services with processes and methods to direct giving while maximizing the benefits to your beneficiaries and you. This includes assessing the tax ramifications, impacts on retirement goals, and effects on your estate plan of any potential gift. Only then can we identify and implement strategies to meet your charitable desires while safeguarding your financial goals.
Get Professional Help with Your Estate Plan
Your Capstone Wealth Advisor will walk you through the estate planning phase and keep in touch with you to evaluate, draft, or amend your plan accordingly. As life changes, so too will your estate planning.
Contact us right away in Downers Grove, IL, or from anywhere across the country to get started.
