estate planning: non-tax reasons
DESCRIPTION
Although tax related considerations are often the motivation behind the desire to create an estate plan, it should be clear that there are numerous non-tax reasons for creating an estate plan that are of equal, or greater, importance.TRANSCRIPT
ESTATE PLANNINGNon-Tax Reasons to Plan
Avoiding, or decreasing, an estate’s tax burden
is often a motivation behind estate planning
While tax avoidance is certainly an important goal of a
comprehensive estate plan there are other important reasons to
create an estate plan
INCAPACITY
Incapacity may be the most important reason to create an estate plan
1
Without an incapacity plan healthcare decisions may default
to someone unintended
An advance directive, healthcare POA, or similar document lets you decide who will make healthcare
decisions if you become incapacitated
END OF LIFE DECISIONS
can also be made in a separate document
A property POA allows an agent to
control property in the event of your incapacity
DIVISION OF ASSETS2
Most common reason people give for estate planning
Particularly important if you do not want your intestate heirs to
inherit
Allows you to gift to an unmarried partner, friend, or
charity
CONFLICT AVOIDANCE3
An estate plan allows you to make your wishes clear
This is particularly important if you are making
non-traditional choices
Sharing your plan lets beneficiaries
and heirs know ahead of time what to expect which often decreases the possibility of
conflict
GUARDIANS4
If you and your child’s other parent are both unable to care for
your child a court will have to appoint a
guardian
Applies to parents and other dependent loved
ones as well
The court will make the decision “without guidance or input from
you.”
A complete stranger could be appointed
By nominating a guardian in your plan you can influence the court’s appointment when the time comes
Someone will need to manage your assets when you die
MANAGERS5
Your estate plan lets you decide
now who the managers will be
BY CREATING A TRUST you can appoint a trustee to
MANAGE THE TRUST
Trustee can be a loved one or professional
trustee
Assets can be transferred to the
trust FOR SAFEKEEPING
Good option if you have minor children
Beneficiaries can benefit from the trust while guarding assets until they are old enough to manage
them
Probate avoidance is a common estate planning goal for many
reasons
PROBATE AVOIDANCE6
Probate can take months, even years, to complete
Assets are frequently inaccessible to intended beneficiaries during
probate
PROBATE MAY BE COSTLY –
diminishes the value of the estate
Probate is public
COORDINATING WISHES
7
A comprehensive estate plan lets you coordinate your wishes in a way that will ensure that they are carried out in the future
Often, there are multiple steps required to ensure that a gift of
property is carried out, for instance
Your estate planning attorney will make sure everything is coordinated
so there are no glitches when the time comes to transfer property or
distribute gifts
Non-Tax Reasons Prevail
Although tax related considerations are often the
motivation behind the desire to create an estate plan
it should be clear that there are numerous non-tax reasons for creating an estate plan that are of equal, or greater, importance
Although tax related considerations are often the
motivation behind the desire to create an estate plan
By Stephen C. Hartnett, J.D., LL.M.
Associate Director of EducationAmerican Academy of Estate Planning Attorneys
9444 Balboa Avenue, Suite 300San Diego, California 92123
Phone: (858) 453-2128www.aaepa.com
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