Good Reasons for Estate Planning Still Exist

The new budget bill, the Opportunity, Balance and Better Budget Act, was just signed on July 4th and includes the federal estate-tax exemption at $15 million per person for next year and provides for the threshold to remain high barring future unknown legislative changes. 

However, this does not take proper estate planning off your to-do list.  The need for wills, trusts and other paperwork lives on, driven by many other forces.  Regardless of your level of wealth, it breaks down to these simple choices: who gets what and when do they get it.  A will is typically more simple and less expensive to draft however a revocable trust tends to be more efficient for passing property and other complex assets from one generation to the next or to charity.  A need to focus on control, clarity and intention remains because in the absence of planning, matters default to state intestate succession laws and court-supervised probate procedures which can be very different from what you actually want done.  So, despite the name, estate planning is about more than the dollar value you leave behind. 

A comprehensive plan typically includes incapacity documents like a durable power of attorney, healthcare proxy, HIPAA authorization and a living will, plus a will or a trust for handling a person’s affairs after death.  If you don’t do this planning, your family has to deal with all the mess.  Many people have run into situations where there was an asset they didn’t know about that cost them a huge amount of time, and a possible trip to probate court, in order to settle.  There can be a lot of tumult and stress in families that haven’t planned properly.  Perhaps you have not updated documents and assets go to the wrong people, such as an ex-spouse or someone who has already passed away.  Perhaps you had charitable intent that is not addressed in legal documents.  Perhaps your adult children fight over assets or your medical care.

Regardless of your net worth, planning should focus on your intent and not just the estate tax.  Please consult your financial advisor or estate planning attorney to discuss your options.