There is a common misconception that estate planning is only for the wealthy. This is not true!
Estate planning is the process of deciding how you want to distribute your estate when you die and selecting the most appropriate method for achieving your desires–this could be a Will, a Trust, or even a combination of the two. Whether your estate is worth $10,000 or $10,000,000 when you die, there are still decisions to be made about how your estate will be distributed when you die and who will handle this process (known as probate/estate administration).
For instance, do you want everything to go to your spouse? Or maybe to your children? Or maybe even your grandchildren? Are those who will inherit your estate responsible enough to manage their inheritance if something were to happen to you today? Do you have any adopted children or stepchildren that you want to be sure are included in your estate? Who do you want to be in charge of carrying out your wishes when you die? These are just a few simple questions that will have a huge impact on your estate plan.
Another consideration which should be made when developing your estate plan is whether you have significant assets invested in retirement accounts, including 401(k)s, IRAs, annuities, etc., particularly those which are tax-deferred (you have not yet paid income taxes on the amounts accumulated in these accounts but will pay income tax when amounts are withdrawn). If the proper planning is not done with these types of assets (which requires advanced and specialized knowledge in this area of the law), your heirs will incur a significant amount of income tax upon your death from the transfer of these assets from your name to theirs. With proper estate planning, we can minimize this income tax burden to your heirs.
An additional consideration is whether your heirs may be required to pay death taxes when you die. There are currently two types of death taxes: (1) Tennessee state inheritance taxes and (2) federal estate taxes. When we are developing an estate plan for you, we consider whether your heirs may be required to pay either of these two death taxes, and if so, how we can minimize these death taxes with estate planning.
When we put together an estate plan for you, there are really two parts. First, your estate plan will include a Will or Trust, if we believe it is appropriate for you. Second, we always recommend that you have powers of attorney in place (for both financial and health care matters) and a living will. While your will is effective only after your death, your powers of attorney and living will are effective during your lifetime. There are many benefits to having powers of attorney. One benefit is that your powers of attorney name the individual or individuals you desire to make financial and health care decisions for you in the event you become incapable of making these decisions for yourself. It is desirable that you choose these individuals rather than have a judge choose them for you.
Whether you already have a Will or Trust which you would like us to review, or are just beginning to plan for your death, we can help you. We will review any estate plan you already have in place and will determine if it is still a good plan for you. If not, or if you do not have an estate plan in place, we will work together with you to develop a comprehensive estate plan that will accomplish your desires upon your death and minimize your estate tax exposure. With combined experience of over 30 years of estate planning experience with estates considered insolvent to estates valued at more than $11,000,000, we have the knowledge and expertise to handle your needs.
Contact us today to schedule an appointment to discuss your estate plan.