Those with enough income for a comfortable, even somewhat luxurious, lifestyle, often fail to plan ahead and create an estate plan while working. Unfortunately, this puts their assets at risk. Heirs to a large estate will have no tax planning or other protections on their inheritance if their loved ones do not take the proper steps.
Many CEOs and other business leaders spend their lifetimes working hard to earn their wealth. They simply do not take the time to think about their estate planning needs while they are in the field. Instead, they wait until they are in retirement.
This can work if the individual makes it to retirement age. However, life is unpredictable, and leaving your wealth without an estate plan is like not having insurance. While certainly no one wants to need insurance, lacking a plan when needed can bring about extraordinary difficulties.
An estate plan allows for an individual to specify where, when and how heirs will receive assets. This can potentially avoid contentious probate proceedings and heirs competing for assets. Tax planning can maximize the amount heirs receive and ensure charities receive the full benefit of their gift.
Yet estate plans are not just for the very wealthy. Every individual, no matter how much worth they have, needs to have a proper estate plan. For those with children still in the home, an estate plan ensures that the children’s guardians are those you select. For those who own all or part of a business, an estate plan ensures that your stake will pass down to the individual you think will properly manage it. When you have significant assets, a properly structured estate plan may protect some of that wealth from estate taxes.
Everyone should have a will that outlines where their assets will go, trusts that serve various purposes, such as tax planning, and a living will that states who has the right to make healthcare and other decisions in the event of incapacitation. Estate planning documents are powerful tools for anyone, no matter their wealth, that protect what individuals have worked hard to accumulate.