Estate planning: It's not just about the taxes

February 22, 2013

Estate planning: It's not just about the taxes

Article provided by Berman & Asbel, LLP
Visit us at http://www.estateplanning-ssdi.com

Many people associate estate planning with taxes. While reducing tax liability is a part of estate planning process there are also other non-tax issues that every person should be aware of when creating an estate plan.

Some of these considerations include:
-Life insurance policies. Life insurance policies that have a cash value are an investment. Like any other investments, life insurance policies should be reviewed periodically to ensure that the investment is performing competitively. The insured should also confirm that the policy will be in effect to protect the beneficiary after his or her death.
-Trusts for minor children. A minor's inheritance needs to be protected from unforeseen circumstances, such as lawsuits and bankruptcy. The best way to ensure that a child receives the inheritance you intend to leave for him or her is to put it in a trust. A trust acts as a shield for the trust assets while the child is a minor.
-Don't forget the family business. If you own a family business, it is extremely important to map out the details of your succession of your business in your estate plan, including future ownership, management, voting control, and a dispute resolution procedure for when the future owners disagree.
-Beneficiary designations on life insurance, retirement plans and annuities. After your death, any asset for which you have designated a beneficiary will go to that beneficiary -- even if your will says something different. That's why it is important to update your beneficiaries after a divorce or other major life change. If a minor child is the designated beneficiary, either that asset or investment needs to be put into a trust or a custodian needs to be appointed for it in your estate plan.
-Planning for incapacity. An estate plan should not only address what will happen to your assets upon your death, but it should also create a durable power of attorney that names the person of your choice to handle your financial affairs if you become incapacitated. In addition, a health care power of attorney names someone to make health care decisions for you. Both of these are essential components of all estate plans.

Contact an experienced wills and estate lawyer

Creating an estate plan and keeping that plan up to date is extremely important to ensure that your assets are ultimately distributed according to your wishes. If you would like to learn more about estate planning tips and information, contact an experienced estate planning attorney in your area.