The passing of Aretha Franklin and the news that she did not have a will, shines a bright light on a common issue for families: parents who do not have an estate plan in place. No one likes to think about death, notes New Orleans City Business in the article “Is your estate in order? 5 Key takeaways to consider.”
If you have a will, you can ensure that your legacy will live on and your loved ones will be protected. Proper planning can help your family avoid additional stress, family battles and complications you can’t even imagine.
Here are a few takeaways to help you get your estate in order.
Talk with your estate planning attorney, CPA, and financial advisor. These three professionals should work together to educate you on tax and legal structures that will best provide for beneficiaries, while minimizing tax consequences. Your situation may benefit from one of the many trusts that are used by estate planning attorneys. The estate tax exemption for 2018 is $11.2 million, increasing annually for inflation. There have been several other changes to the tax code in recent years. Therefore, if you have not reviewed your will in recent memory, it is time to do so.
Make gifts while you are living. This can help you to take advantage of tax savings and reduce your total gross estate. Gifts can be made with a value up to the annual gift tax exclusion each year, without ever touching the lifetime exclusion. The exemption amount for 2018 is $15,000.
Do you know your net worth? Understanding your real net worth can determine what your beneficiaries will be responsible for upon your death, whether estate taxes will need to be paid and how to maximize exemptions and deductions.
Name an executor. Who do you trust to run your estate and ensure that your wishes are carried out? You need to select someone who you trust to make the hard decisions, even if they are not the first choice of other family members. Name alternative executors, in case the person you name dies before you, declines the position or cannot serve for reasons of incapacity.
Change your wishes if you want. Just as people change over time, or events cause us to rethink our choices, your will and any other estate planning documents can change. Review estate plans and beneficiary designations every few years to be sure they still reflect your wishes. Failing to do so, can result in the same unnecessary expenses and family turmoil as not having a will in the first place.
Reference: City Business (Aug. 31, 2018) “Is Your Estate In order? 5 key takeaways to consider”