Estate Planning

We attended a Focus Group regarding generational wealth building, and one question asked was, “Are Wealth Building and Estate Planning the same thing”? The surprise was the amount of banter in both directions. Answers ranged from they’re not the same to they are the same thing. The most provocative misconceptions of estate planning are that you can have either just not both.

Let’s first set the stage for the two disciplines. Estate planning is the process of gathering any assets you have, such as any financial accounts, real estate, and heirlooms, and planning how you will distribute those assets to your beneficiaries. Estate planning helps you set yourself and your loved ones up for success if/when anything happens to you. Wealth building is the strategic process of generating long-term financial security by accumulating assets and minimizing debt. The goals are to protect and increase one’s net worth. It is a journey that primarily involves earning, saving, and investing. Most importantly, protecting your money consistently over time.

Misconceptions of Estate Planning Demystified

In reality, people use Estate Planning as another pillar to build generational wealth.. Purchasing a home is one of the largest investments that most people make. Real Estate is the one investment you can always rely on to appreciate in value. Real estate planning is an essential component of estate planning. It is the comprehensive process of managing and arranging your assets and affairs to ensure you carry out your wishes.. This needs to happen during your lifetime and after your death. Here are some of the most common misconceptions about estate planning.

1. Estate Planning is for the Wealthy
2. Estate Planning is for the Elderly
3. Assets will automatically pass to heirs
4. There will NOT be the need to Probate the estate
5. I’m too young to consider Estate Planning

This process is crucial for everyone, not just the wealthy, as it provides peace of mind. Planning also helps avoid legal hurdles and family disputes. The estate planning process involves a series of steps and key legal documents. Those documents design to manage and transfer your assets, address healthcare wishes. Equally important are they provide for loved ones during your lifetime and after death.

We have the expertise and the resources necessary to plan your estate. Results are that what you leave is adequately provided for. Amassing fortunes and passing them to survivors as close to tax-free won’t happen in a vacuum. Proper estate planning ensures your legacy will continue working for your survivors just like it worked for you.

Living trust advantages are above and beyond not having one when a person owns property. A living trust, AKA a revocable trust, is a legal arrangement where an individual transfers assets to a trustee. It is the trustee who then manages those assets for the grantor’s benefit. This happens during their lifetime and for beneficiaries after their death. It’s a way to manage and distribute assets in a structured way, often avoiding the probate process.

A trust allows for a smoother transfer of your home to heirs without the need for court, time, and expenses. Privacy: Probate is a public process, while a trust keeps matters private, protecting your family’s affairs from public scrutiny. There isn’t a specific net worth that dictates whether you need a trust. It depends on your individual circumstances and estate planning goals.

While a will is typically a good starting point, a trust might be beneficial if you have assets exceeding $100,000. Minor children or complex financial situations. Additionally, you want to minimize estate taxes, protect assets from creditors. Or ensure your wishes are followed regarding how and when your inheritance is distributed, a trust can be invaluable.

Pro’s / Cons of a Living Trust

Winding down a life where you have accomplished much, most people seek peace of mind. Those same people want to ensure that generational wealth is expanded. Proper distribution of wealth includes receiving benefits from the disposal of property. Trusts can be perceived as having negative aspects due to their complexity, potential costs, and lack of automatic judicial review, which can leave beneficiaries vulnerable to mismanagement. While they offer benefits like asset protection and control over distribution, trusts also come with drawbacks such as the need for ongoing record-keeping, potential tax burdens, and the possibility of disagreements among beneficiaries.

Here’s a good rule of thumb: If you have a net worth of at least $100,000 and have a substantial amount of assets in real estate, or have very specific instructions on how and when you want your estate to be distributed among your heirs after you die, then a trust could be for you. A trust is often preferred over a will because it offers more flexibility, control, and privacy. Clearly, living trust advantages are better protection against taxes and avoiding probate. Trusts can also avoid probate, which is a public court process that can be lengthy and expensive. While wills only take effect after death, trusts can be set up to manage assets during your lifetime, and offer more control over how and when assets are distributed.

Whatever choice you make, we stand ready to prepare living trust documentation for protecting your assets. We will walk with you from document creation to implementation.

Tag: revokable trist

Misconceptions of Estate Planning

Misconceptions of Estate Planning Demystified

Advantages of A Living Trust

Pro’s / Cons of a Living Trust