The 3 Most Important Estate Planning Strategies to Protect Your Wealth and Your Family

  • Looking for estate planning tips? Here’s what you need to know to protect your wealth.

    It’s common for people to put off the task of estate planning. However, it’s important to take a proactive approach to the process to protect your wealth before it’s too late. Maybe it’s the unpleasantness of thinking about one’s mortality. Or maybe it’s the fact that the process seems complicated. But many families are put under unnecessary stress in situations where there has not been proper estate planning when a loved one dies.

    Like any caring family member, you want to ensure your family is safe, secure and at peace when you are no longer there. One of the best ways to do this is by taking the time now for careful estate planning.

    There’s no reason to feel overwhelmed by the process when you have estate planning professionals to guide you step by step. At Incompass Tax, Estate, and Business Solutions, our expert team has proven strategies in place. We will make your estate planning as painless and effective as possible.

    Let’s take a look at three of the most important estate planning strategies you can employ to protect your wealth and your family:

    #1: Draw up a Will

    While this may seem obvious, it’s common for people to neglect their will. This legal document is essential to your estate planning. That’s because it allows you clearly to state your wishes. It typically includes the following components:

    • Naming of an executor—the person who will carry out the will’s provisions
    • Identification of beneficiaries- the people who are inheriting your assets
    • Clear instructions for when and how beneficiaries will receive assets
    • Naming of guardians for minor children

    Once you create your will with a qualified estate planner or attorney, you will want to ensure you update it and make changes when necessary.

    When there is no will, your estate would be divided in probate court. That can be a costly process for your beneficiaries. This is not the outcome you want when you have worked so hard to provide for your loved ones. By taking the necessary steps to draw up the will and keep it updated, you ensure your assets will be distributed as you prefer.

    #2: Don’t Wait Too Long for Estate Planning

    Earlier estate planning enables you to put your will and details about the estate transfer in place before you are faced with ill health or diminished mental capacities. An early planning time also gives you the opportunity to discuss your plans with family members, so everyone is on the same page.

    You may have beneficiaries that will need to come to terms with your choices for estate transfer. Having this information in advance will minimize stress and conflict for your family members following your passing. You won’t be there to walk them through the time of estate disbursement. But early estate planning gives you the chance to provide guidance and share your thoughts with them while you are still living.

    #3: Set Up a Trust

    If you have a large estate or are concerned your beneficiaries may not use your money wisely, you can set up a trust. With a trust, you appoint a responsible trustee to distribute your estate following your death. If you wish to place stipulations on the trust, you are free to do that and the trustee must follow your wishes.

    There are a few ways to set up a trust. But permanent trusts tend to provide the most tax benefits. Once money is placed in the trust, you no longer own the assets. That means the money is not subject to estate taxes. However, there are taxes on any income from dividends and interest. So, it’s important to consult an estate planning professional to create a trust that will best meet your goals.

    For more estate planning tips to help you protect your wealth, get in touch with our estate planning experts at Incompass Tax, Estate, and Business Solutions today.

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