What Are the Basic Guidelines for Estate Planning?
Did you know that estate planning is one of the many different aspects of wealth management in 07663? Most people don’t want to talk about death because it makes them feel uncomfortable. However, if you want to save your loved ones large amounts of money and stress when they’re most vulnerable, you’ll want to be prepared for whatever may happen.
The Basic Rules of Estate Planning
Create a Trust
Whether or not you have a sizable estate, it’s best to hire an experienced attorney. They can help you create a bullet-proof will, draft Powers of Attorney for Property and Healthcare, and create a Trust to help you save time and money.
A trust gives you more control over how your heirs can receive the money and what they can do with it. This is extremely important if something happens to you and your heirs aren’t old enough to take responsibility for their assets. Since a trust can come with rules, you have the option to allow your heirs to use their inheritance for medical needs, college tuition, or other specific reasons.
Protect Your Business
If you’re a business owner, you should know that you have your own set of estate planning needs that have to be met to avoid certain risks. These risks include loss of business value, material dissipation of assets, litigation, and tax inefficiency.
First, they must establish a good business continuity plan by drafting a buy-sell agreement to serve as a self-created exit strategy. This agreement obliges a pre-selected buyer to buy ownership interests that are based on trigger events. Aside from naming potential buyers, buy-sell agreements also pre-determine valuation methods that should be applied at the time of purchase to steer clear of potential litigation and disagreements.
The last thing you want is to get sued and lose all of your estate assets even before you’re gone. The only way to keep a creditor of your company from claiming your personal assets is to create multiple asset protection entities.
These include a separate entity for the operating company and another to hold the firm’s estate. If you want to protect your real estate assets against lawsuits against your operating company, it’s best to create asset protection entities.
Since you worked so hard to keep your business growing, you’ll want to plan for business succession to protect the fruits of your labor. The best way to avoid disorder is to create a contingency plan and name your successor directors in documents.
A Limited Power of Attorney for Business Decisions can help you make sure that the most qualified individual will step in to keep your company running when you’re gone. On the other hand, the more general Power of Attorney will only leave your spouse or another person who’s not related to your business with the responsibility to make decisions in your stead.
Talk To Your Family Members
Once your estate plan is ready, you’ll have to talk to your heirs about how your plan is going to affect them. Although your estate plan will clearly outline the tangible assets you’re going to pass on to them, they still need to know about what’s going on behind your assets. Start an honest conversation with your family about how the will or the trust works so that they won’t have to hear it from your lawyer first.
At 1879 Advisors, we’re here to help you plan for the future and make better choices for you and your heirs. Contact us today to schedule an appointment.