Estate planning is important for everyone regardless of your financial status or the dynamic of your family. At the same time, different people are going to have different needs. Some will need a traditional plan, and others will benefit from legacy wealth planning.
This is one of the reasons why it is important to retain the services of a licensed Indianapolis estate planning attorney when you are planning your estate. Your attorney will gain a comprehensive understanding of your unique situation and help you craft a tailor-made estate plan that is ideal for you.
In this post we would like to draw some distinctions between traditional estate planning and legacy planning in Indianapolis.
Traditional Estate Planning
Traditional estate planning is going to be appropriate for people of relatively ordinary means who have simple, straightforward objectives.
When you think about traditional estate planning you probably equate the exercise to the creation of a last will or last will and testament. Indeed, many people who create traditional estate plans do in fact express their final wishes through the execution of a last will.
The above having been stated, you could use an alternative vehicle of asset transfer when you are planning your estate in a traditional manner. One very commonly utilized instrument is the revocable living trust.
When you use a last will to arrange for the transfer of your assets the heirs to the estate don’t receive their inheritances until the estate has been probated. Probate is a legal process that can be lengthy and expensive.
Revocable living trusts enable asset transfers to the beneficiaries outside of probate.
In addition to the asset transfer element, a traditional estate plan should also include an incapacity component. This would involve the execution of a living will along with durable powers of attorney.
Legacy Planning in Indianapolis
Some people need to take additional steps beyond the traditional norm. Legacy wealth planning is something that is going to be engaged in by high net worth individuals.
Estate tax exposure is part of the equation. If your assets exceed $5.25 million in value ( this is the amount of the exclusion in 2013) your estate is potentially exposed to the estate tax and its 40 percent maximum rate.
You could deploy tax efficiency strategies to mitigate your exposure while you are engaged in your legacy wealth planning efforts.
Asset protection could also be part of your legacy wealth plan. Litigious types often look for “deep pocket targets,” so it is important to keep your assets out of harm’s way.
Philanthropy can also be a part of your legacy wealth plan. You can have your name attached to charitable giving for many years after your passing. And, tax advantages can often be realized through philanthropic endeavors.
These are a few things to think about, but a custom crafted legacy wealth plan could address a number of additional concerns.