Many people may view
estate plans as a tool
enabling rich folks to avoid
paying mega-tax bills,
however, that perception is
a bit skewed. There are
many other reasons it makes
sense to formulate an estate plan. Some of
these reasons are brought to light below.
In reality, most people have very specific
wishes regarding “who” and “when” related
to inheriting assets. If you don’t have a
formal estate plan, the state will decide the“who” and “when” for you, and their
decisions may be very different from choices
you would make.
The state will even appoint a guardian for
your children if you don’t have a plan that
sets forth your wishes. Maybe the state
believes your brother Tom is a completely
suitable guardian for your children. You,
however, would much prefer your sister,
Sarah. How’s anyone to know if you don’t
document your preference? And how can
you leave young children an inheritance
without spoiling them or de-motivating them
when they are in their 20’s?
What if you have a family business? Do you
have a plan in place for its continued
operation thereby providing much needed
income for your family upon your death?
Do you have a vacation home you want your
children to continue to share after you are
gone? Without careful planning, these
vacation homes are legendary for their
ability to tear apart the children over issues
such as who gets to use the home and when,
payment of taxes and expenses, and what
repairs and improvements should be made.
Do you have children or grandchildren with
disabilities who would lose government
assistance if left money directly?
Finally, you should consider that you are
uniquely able to protect the inheritance you
give your children from potential future
lawsuits, divorce, and bankruptcies, without
depriving them of their ability to administer
their inheritance. This is increasingly the
way sophisticated clients are leaving assets
to their children, and it makes sense even if
the assets are as little as $200,000 to
$300,000 per child.
If any of these scenarios rings a bell with
you, you may want to consider meeting with
an estate planning professional to help you
ensure your wishes will be carried out.
Source: NWHerald.com, 11-30-05
