Estate planning creates a plan for the management of your property during your life and its distribution after death. Proper estate planning gives you greater control over your assets during your life, provides better management of those funds should you become disabled and allows for transfers of your wealth to whom you want, when you want and with the lowest possible cost.
Common estate planning issues addressed in wealth management include the transfer of wealth, minimization of transfer taxes, asset protection and charitable giving.
Wealth transfer planning involves the smooth transfer of wealth to the next generation or charities as you choose. Proper planning allows you to choose who, how and when your assets will be distributed. The planning also defines who will manage your estate or business. Wealth transfer planning also involves the management of assets during disability or incapacity.
Many estates are subject to various taxes including gift tax, estate tax and income tax. One major goal of estate planning is to minimize potential taxes without interfering with your other financial goals.
When your assets become sizable, creditor protection can become an issue. Creditors can include people like the IRS, accident victims, Medicaid, business creditors or an ex-spouse. Asset protection plans first identify potential exposures and then identifies preventative tools and strategies to help reduce that risk.
Many people donate to a favorite charity because they believe in the charity’s mission and gain a sense of personal satisfaction by contributing to the vision – that they participated in something bigger than themselves in trying to improve our world. Our government encourages charitable giving through tax rules that reduce income and estate taxes. Charitable planning involves reviewing your wealth management plan to determine the best time and best asset to transfer to the charity in order to bring you and the charity the greatest benefit.
Wealth management does not end with estate planning but coordinates it with your overall plans for your business, investments, insurance and employee benefits.