What Is Estate Planning?

Estate planning is the process of determining how your estate will be distributed upon your death. A good estate plan will help make sure your final wishes are honored and can also maximize the size of the estate by minimizing taxes.

Who Needs Estate Planning?

Some people harbor the false impression that only older or wealthy people need an estate plan. The reality is that everyone needs an estate plan, particularly if you answer yes to any of the questions below:

• Do you own a business?
• Do you have minor or dependent children?
• Do you have dependent elderly parents?
• Does the value of your estate exceed the amount exempt from federal estate taxes?
• Do you have specific wishes for how your estate is distributed?
• Do you want to avoid unnecessary taxes and probate?

Distributing Your Estate

Proper estate planning can reduce estate taxes and provide for your heirs and charities. Estate planning can also:

• clarify your wishes,
• set up guardianship for dependent minors,
• establish an executor for your will, and
• create funeral arrangements in advance, alleviating your loved ones of the burden of making those decisions.

Titling of Assets

Title indicates ownership of a particular asset and titling your assets is essential to proper estate planning. The way you title your assets can affect your estate after your death, and it can also impact you while you are still living.

Properly titling your assets accomplishes several things:

• it can reduce your exposure to liability,
• define the assets that are legally part of your estate and can pass to your intended heirs,
• prevent confusion and arguments among your heirs,
• ensure that your estate can be properly administered if you become disabled, and
• reduce the costs and taxes associated with distributing your estate upon your death.

Gifts

Estate planning is not just about what happens after you are gone. It is also about deciding how much you want to give as gifts while you are still living. You may wish to give gifts to charities or heirs before your death, allowing you to enjoy the experience of giving and possibly reduce your taxable estate at the same time.

Power of Attorney and Living Wills

Estate planning also involves making provisions in case you become incapacitated and cannot make your own decisions. Whether through injury or illness, if you are unable to make your own decisions, someone will have to make them for you. Establishing a durable power of attorney, health care surrogate, and living will makes your wishes known and ensures that key decisions affecting your wealth and health are made by someone of your choosing.

Let Allen & Company help with your estate planning today.

Your Allen & Company Financial Advisor can work with your attorney to make sure that the necessary provisions are in place to ensure that your final wishes are carried out.