Why Is It Important to Have an Estate Plan?
An estate plan serves multiple critical purposes beyond simple asset distribution. The federal estate tax exemption currently stands at $11.2 million per person, yet nineteen states impose their own estate taxes ranging from 0.25% to nearly 20% of an estate’s value.
Key Reasons for Estate Planning
Asset Distribution and Family Protection
A will directs how your assets are distributed according to your wishes. For those with grandchildren, strategic gifting can minimize taxes, though generation-skipping tax planning becomes necessary. Families with disabled or special needs members benefit from special needs trusts that provide additional resources and protection.
Business Succession
Business owners must align succession planning with their estate plan. Decisions about whether family members inherit ownership or the business gets sold require advance planning and documentation.
Naming Decision-Makers
Your will designates an executor to implement your expressed wishes. This person handles all decisions and ensures your intentions are carried out.
Charitable Giving and Gifts
Wills can direct gifts to charitable organizations or individuals outside your family through various gifting strategies.
Tax Planning
The federal estate tax exemption reverts to 2017 levels in 2025. Advance tax planning protects both your estate and heirs.
Life Insurance Review
Named beneficiaries on life insurance policies deserve review. If your estate is the beneficiary, its value might exceed federal or state tax thresholds.
Ethical Wills
Non-binding ethical wills express your values and wishes for heirs’ futures, potentially preventing legal challenges and family conflict.
Incapacity Planning
Powers of attorney and healthcare proxies ensure someone manages your finances and medical decisions if you become incapacitated.
Without comprehensive planning, your loved ones face magnified difficulties during illness and after death. Consultation with an estate planning attorney should begin immediately.
If you or a loved one needs assistance with elder law or estate planning issues, do not hesitate to contact us. We are here to help.
