Estate Planning Simplified

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Only 4 in 10 American adults have a will according to AARP, and a report by NBC says that 75% of Americans say that estate planning is confusing.

The rules keep changing, but the vast majority of Americans will not have to worry about the estate tax at least until Jan. 1, 2026.  Currently $11.18 million per person can be passed down to heirs, so a married couple can leave $22.36 million without worrying about paying death taxes.  If your net worth is close or over these levels than gifting and complex planning would be encouraged, but if not then some basics will suffice.

  • Will – Provides you the opportunity to control the distribution of your property, appoint an executor to handle your estate and guardians for minor children.  You can set-up a trust if you have an heir that is a minor or incapable of properly handling their finances.
  • Durable Power of Attorney – Allows you to appoint someone to handle your affairs if you are incapacitated, which has a higher likelihood than death.
  • Beneficiary Designations – Retirement assets (401Ks, IRAs, Roths) and life insurance should be checked periodically. Life happens and these can become stale and not what you intended, so we recommend review every 5 years or after a major life event.
  • Living Will – This document establishes what type of care you want in case of incapacitation.  It’s best to inform family members where this is kept.
  • Healthcare Proxy – Allows you to pick a person who can make medical decisions for you.  Choose someone who has the same ideas about quality of life as you.

We also advocate gifting during your lifetime if you have the financial capacity.  Why not enjoy the benefit of seeing those you love derive benefit from your gift while you are living.  In addition, it will give you some insight into how they handle money as well.

We never know for certain when you time will come, just that it will.  We know it’s not a fun subject, but you will be wise to plan.

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