Estate Planning

There is a misconception that you have to be wildly affluent to worry about estate planning. The truth is, no matter how wealthy you are (or aren’t), estate planning is an important aspect of the financial planning process.

At its most basic, your estate plan details what happens in the event of your death. While a life insurance policy or, in some cases an annuity or pension, will issue benefits to your beneficiaries, other assets types will need to be addressed. These other items can include savings accounts, real estate, vehicles, valuables, and so forth.

Estate planning can sometimes be a simple as officially designating beneficiaries in wills and policy forms. However, the actual mechanics of transferring wealth to the next generation can be quite difficult and complicated. Improperly structured estates can be reduced through taxation, lead to issues with heirs and beneficiaries, and unnecessarily burden your family with choices are you aren’t around to make.

While most estates won’t face estate tax, you’ll still need to consider how taxes will impact the assets received by beneficiaries. This is because received assets will generally incur ordinary income tax, which can erode significant amounts of an estate’s accumulated value. Complicating this issue is when assets aren’t monetary, but physical, such as example real estate or land.

Fortunately, there are many solutions and strategies that help minimize tax-burdens, making wealth transfer more efficient. Every individual will necessitate a custom-designed plan that takes in account their specific assets and goals. Strategies and products such as trusts, annuities, and life insurance are often used to structure tax-efficient estate plans.

When should you begin estate planning? If you have legacy goals and transferable assets, you should consider estate planning now. Having a plan that works in concert with all phases of your financial life helps to provide sustainable income in retirement and beyond.

To properly establish an estate plan that works with your specific retirement plan, assets, and legacy goals, you should seek out as a financial advisor that provides an expert hand.

Contact L2P at 919-797-4505 to secure your legacy.

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