Making an estate plan is vitally important. If you do not make a plan for what happens after your death, and at the end of your life, the default rules that apply could result in undesirable outcomes. You want to ensure you have taken the necessary steps to protect your wealth and to provide the maximum financial security possible for your loved ones.
There are many different estate planning techniques that you can incorporate into your planning process. To ensure that you select the right tools for estate planning and that you use those tools correctly, you should talk with an experienced attorney. The Law Offices of James A. Miller, P.C. can provide the assistance that you need to make your plans. Give us a call for personalized assistance. You can also review 10 top estate planning techniques below.
Ten of the top estate planning techniques that you may wish to consider include:
- Power of attorney: Your estate planning lawyer will do more than just help you find ways to pass on wealth and protect loved ones after you are gone. Your attorney also assists with end-of-life issues and incapacity issues. If you are sick or injured and can’t communicate, a power of attorney is a powerful tool. If you create your power of attorney before something happens to you, you can ensure that an agent you select can make decisions on your behalf when you cannot. If you do not take action, your loved ones could be forced to go into guardianship proceedings with an uncertain outcome as to who the court will appoint as guardian.
- Advanced directives: You should create advanced directives in order to make your preferences clear on your wishes for or against medical care in the event of an incapacitating injury or a terminal illness. Creating an advanced directive is an important part of your estate planning process so you do not lose all autonomy over medical decisions, even if your mind or body no longer make it possible for you to make decisions.
- Making a will: A will is a basic but important estate planning tool that allows you to specify who should inherit when you are gone. You can use a will to create testamentary trusts and to accomplish many other goals as far as providing for the people who you love.
- Creating trusts: There is a huge array of different kinds of trusts, from spendthrift trusts to special needs trust to domestic asset protection trusts. The reason trusts are so widely used in estate planning is because they are very effective at accomplishing different goals, like letting assets transfer outside of probate or letting assets transfer without putting means-tested benefits at risk.
- Using Pay-on-Death Accounts: A pay-on-death account can be used to facilitate automatic transfer of account assets to new owners after a death. This allows for an inheritance of account assets outside of the probate process.
- Creating a Family Limited Partnership: By creating a family limited partnership, you can make gifts of assets while still retaining control, and you can protect assets from creditors even as you make gifts. You can also reduce or avoid estate tax through the strategic transfers of an ownership interest in the partnership.
- Joint ownership: In certain circumstances when you own property jointly, that property can pass outside of the probate process. The way in which ownership is structured is going to impact whether or not the property will automatically pass to a new owner. For example, if you own the property as joint tenants with rights of survivorship, this should make it possible for the property to be automatically transferred to the surviving owners upon the death of any one of the joint tenants.
- Incorporation: Creating a corporation is an effective estate planning tool. If you are the owner of a business and you incorporate the company, you no longer need to worry that your personal assets (and thus your opportunity to leave a legacy) will be lost due to a problem with the business that leads to a lawsuit or bankruptcy. Since incorporating creates a separate legal identity for your business, this separation from you as the owner can also make it easier for the company to survive after you are gone.
- Buy/sell agreements: This is an important estate planning technique for business owners. It allows owners of companies to be protected by establishing a protocol for what happens when any owner must leave the company as a result of disability, death, or for any other reason. A buy/sell agreement is an important estate planning tool because it helps to ensure a business can continue even after you are gone.
- Inter vivos gifts: It is possible to make gifts during your lifetime, which can reduce the amount of money and property that transfers after your death. There are estate tax issues that some families need to consider when it comes to transferring property after a death. If your estate is large enough that there is the potential it is going to be subject to estate tax after your death, you can try to reduce the tax due or try to avoid the tax altogether by making strategic gifts during your life. If you can keep your gifts valued at an amount below the threshold that would trigger a gift tax, you can give away wealth without incurring a big tax bill. You are allowed to give a substantial amount of gifts before being hit with a tax bill. You should talk with an experienced attorney to find out more.
The Law Offices of James A. Miller, P.C. can provide assistance with all of these techniques and can help you to explore other alternative options that may be beneficial for your estate planning needs. To discover more about how our legal team can assist you, give us a call at 866-370-3888 or contact us online today.