Estate Planning for the Rest of Us

Now that couples can exclude up to $10 million ($5 million for singles) from estate taxes, most of us have no need to worry about estate planning. Right? Well, not exactly. Clients still have estate-planning needs that need to be addressed. Here are just a few that financial planners and advisors should keep on their radar for all clients, no matter the size of their estates:

  • Legal documents – Virtually everyone who owns property needs to have a will. A durable power of attorney and a living will or health care proxy are also advisable.
  • Minor children – Trusts should be considered whenever minor children are involved to provide protection in the event that both parents die before the children are grown. For example, by naming a revocable trust as the beneficiary of life insurance, the trust can provide for the education and welfare of the children until they reach sufficient age to maturely handle their inheritance, typically after college. This prevents the potentially disastrous effect of merely naming them as life insurance beneficiaries, whereby they will receive their inheritance outright upon their 18th birthday (in most states, although later in some).
  • Special needs – Trusts should also be considered to provide uninterrupted support whenever there is a family member with special needs.
  • Business – Plans need to be put in place for the smooth transfer and continued operation of a business following the death of the owner, even when no estate taxes will be due.
  • Retirees – Living trusts should be considered for retirees, particularly when they live away from family members, to provide financial security in the event of incapacity.

These examples illustrate that estate planning remains an important consideration, even in an age where most people do not need to worry about estate taxes.

To learn more about estate planning check out our course titled Advising the Affluent Client: Estate Planning.

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