An unfortunate misconception about estate planning is that it is synonymous with tax planning. Avoidance of estate taxes used to be much more of an issue than it is now, for the exemption has risen to $5,430,000 for the year 2015. This does not mean that if your estate is worth less you do not need to worry about estate planning. Indeed, careful planning is vital even for those whose estates are relatively small, and you should work with an experienced Kingwood estate lawyer when doing so.
Legacy Planning vs. Estate Planning
It is useful to think in terms of legacy planning rather than strictly estate planning. The distinction is important, for it suggests planning for how heirs will handle assets left to them. Many estates that are carefully developed over a lifetime to aid beneficiaries later are squandered or mishandled.
The first order of business in legacy planning is to prioritize beneficiaries. For many, the first person on the list will be a spouse, followed by children, and then grandchildren, other family members, charities, etc. An attorney who helps you with legacy planning will have you consider potential special circumstances that often arise:
- Remarriage of a spouse
- A spouse has an accident, serious health issue or creditor problems
- A child divorces, has a lawsuit or creditor problem
- Death of a child or grandchild who is a named beneficiary
- Protection of personal and family heirlooms
- A spouse or child is not responsible with money
- Protection of a business
Your Business in Legacy Planning
A family business requires special consideration. If you have been running a family business, you will want to make sure that the person who takes over its management will adhere to its mission as well as run it wisely. You need also to consider who will own the business and who will benefit from it. These three need not be the same individual.
Protecting Your Own Financial Security
One of the more neglected aspects of legacy planning is making sure that you provide for possible situations that may arise for you during your lifetime. You might, for instance, require nursing home care for an extended period in the future. Careful legacy planning takes into account such possibilities. Remember that if you don’t look after your own financial well-being, you aren’t going to be able to do so for your heirs.