Estate Planning
| Advantages to Estate Planning | |
The most common questions about estate planning is “Do I really need to do an estate plan?” or, “Why do I need to do an estate plan?” If you really care about your love ones, you need to plan ahead and stay on top of things to save some time and protect your family in the event of your death. It is also a great financial planning tool that will improve handling assets, savings, investments, and real estate after the owner’s death. Advanced estate planning can be used to perpetuate family values and protect assets for the benefit of future generations. Estate planning also helps reducing taxes by having a better understanding on specific perks, like gift taxes, charity give away, appreciated stocks, and trust benefits.
There are four distinct objectives of a proper estate plan. Many times a plan is perceived as only having one, or possibly two, of those objectives. Since there may be different specialists involved in the Estate Planning process, such as Attorneys or Accountants, an individual should be sure to not only realize such shortcomings in a plan, but to safeguard against it. A truly comprehensive estate plan will address all four of these objectives: create liquidity, avoid probate costs, reduce taxes, and execute dispositive documents. Liquidity means the ability to convert assets to cash without giving up value. Because of death and its related costs that must be paid within a short time following death, one must be absolutely certain that the estate has sufficient liquid assets to cover such costs. Realistically it would seem that the annual increase in the cost of dying has exceeded the annual increase in the cost of living. Costs of burial plots, cemetery monuments, funeral director 's fee and attorney fees have risen. Thus, if an individual’s estate presently lacks liquidity, it can be assumed that the liquidity problem would continue to increase in the future. The need for liquidity arises because
The most common questions about estate planning is “Do I really need to do an estate plan?” or, “Why do I need to do an estate plan?” If you really care about your love ones, you need to plan ahead and stay on top of things to save some time and protect your family in the event of your death. It is also a great financial planning tool that will improve handling assets, savings, investments, and real estate after the owner’s death. Advanced estate planning can be used to perpetuate family values and protect assets for the benefit of future generations. Estate planning also helps reducing taxes by having a better understanding on specific perks, like gift taxes, charity give away, appreciated stocks, and trust benefits.
There are four distinct objectives of a proper estate plan. Many times a plan is perceived as only having one, or possibly two, of those objectives. Since there may be different specialists involved in the Estate Planning process, such as Attorneys or Accountants, an individual should be sure to not only realize such shortcomings in a plan, but to safeguard against it. A truly comprehensive estate plan will address all four of these objectives: create liquidity, avoid probate costs, reduce taxes, and execute dispositive documents. Liquidity means the ability to convert assets to cash without giving up value. Because of death and its related costs that must be paid within a short time following death, one must be absolutely certain that the estate has sufficient liquid assets to cover such costs. Realistically it would seem that the annual increase in the cost of dying has exceeded the annual increase in the cost of living. Costs of burial plots, cemetery monuments, funeral director 's fee and attorney fees have risen. Thus, if an individual’s estate presently lacks liquidity, it can be assumed that the liquidity problem would continue to increase in the future. The need for liquidity arises because
Cited: "Probate / Estates." Probate / Estates. Minnesota Judicial Branch, n.d. Web. 15 Oct. 2012. http://www.mncourts.gov/district/8/?page=1109 Garber, Julie "Get Ahead of Your Estate Planning." CNNMoney. Cable News Network, n.d. Web. 26 Oct. 2012. http://money.cnn.com/magazines/moneymag/money101/lesson21/index.htm --------------------------------------------