Estate Planning: What it is and why you should do it
What Is Estate Planning? Estate planning involves the process of planning the accumulation, conservation, and distribution of an estate in the manner in which most efficiently and effectively accomplishes your personal tax and non-tax objectives. Every estate is planned - either by you or by the state and federal governments.
Why You Should Do Estate Planning: The primary goal of estate planning is to ensure that your assets are available to care for beneficiaries -- usually a spouse or family members. While minimizing estate taxes and administration costs are important goals, many individuals are more interested in the direction and timing of their estate transfer, and who will control it. Others are concerned about family values, and teaching their children to manage wealth responsibly. Regardless of one's objectives, it is important to understand that even the best estate planning is completely useless if it is never implemented -- so above all, the process should be manageable and unintimidating.
Common Estate Planning Mistakes:
- Unnecessary income and estate taxes
- Family disputes arising from unclear unintended dispositions
- Underperforming investments due to improper asset allocation
- Insufficient liquidity, causing diminished lifestyle and/or asset sales to pay taxes
- Inability to pass business ownership to the next generation
- Failure to work with a qualified attorney