Estate Planning

The goals of estate planning are to provide financially while you're alive and to maximize your estate for your family and any charities following your death. Estate taxes may significantly impact the wealth you have accumulated unless you employ proper planning. A well-designed estate plan can help create and conserve assets during your life. In addition, effective planning can help minimize estate taxes and estate settlement costs and deliver an orderly distribution of assets that helps meet your objectives.

To fully leverage estate preservation opportunities and develop strategies to help achieve your distribution objectives, you should consider:

Wills and trust design strategies - Your financial planner can review your current wills and trusts to uncover whether they're up to date and what types of trusts are in place. Careful analysis can determine whether your estate may be subject to costly delays in the probate process. If necessary, your planner can design the strategies that incorporate more elaborate tactics through various intricate trusts. These trusts can do a better job of integrating your goals, while preserving your estate and assuring the distribution in accordance with your objectives. Your financial planner can work with your attorney to put these strategies into action.

Property ownership alternative - By titling your assets appropriately, you can avoid unnecessary taxation or probate exposure. You should coordinate the three methods of estate distributions - beneficiary designation, joint titling and "own name" assets - and ensure that your primary and contingent beneficiaries are coordinated with your existing will and trust documents.

Estate tax reduction techniques - It's critical to determine your current estate tax liability and implement steps that will minimize estate settlement costs. These steps may include how to mitigate the impact of future estate growth and how to hedge the uncertainty of future estate tax legislation. A financial planner can help you achieve the maximum tax credits and deductions allowed by the Internal Revenue Code to reduce your estate tax burden.

Life insurance analysis - The arrangement of your current life insurance may be causing unnecessary taxation within your estate. A financial planner can help you determine how well your life insurance suits your situation and if it needs to be modified or altogether changed. A financial planner can help determine your requirements for estate liquidity - both now and in the future - and recommend using discounts or leverage to pay estate settlement costs.

Qualified plan distribution - To avoid the significant drain that income and estate taxes can have on your qualified plan at death, your financial planner can suggest available strategies to minimize these costs.

Family gifting strategies - You may avoid a significant tax penalty if you restructure your existing will to utilize your unified credit during your life, rather than waiting until your death. Further, you may want to consider strategies that would allow you to gift money to your family, but retain certain control of your assets.

Charitable planning - If philanthropy is important to you, you should coordinate your lifetime giving with charitable planning at death. You can explore alternatives to leverage the tax advantages of charitable giving for you and your family.

There are risks and guidelines associated with each of these strategies, so it is important to work with a financial planner, your tax advisor and your legal advisor to help you make the most of your estate.