There are some common misconceptions out there when it comes to retirement planning. Some examples include as long as you have a good nest egg hidden away, you’re ready for retirement, or you don’t have enough money to leave your family to justify the time and cost of putting an estate plan together. The amount of money you have in the bank is not an indicator of whether or not you should have an estate plan because there are a wide range of decisions to be made, not just who inherits your money. It’s important to think beyond what’s in your piggy bank and here’s why.
Where There’s a Will…
55% of Americans don’t have a will. That means that over half of the population of the United States will end up letting the courts settle their estate upon their death or if they become medically incapacitated. People live busy lives today, and there will always be something more pressing to do than putting an estate plan together, but the risks that come with not having one far outweigh the time spent getting it done.
It’s important to take control of your affairs while you still can to ensure your estate is settled as you want it to. In the absence of a legal will and documented power of attorney, the courts could take control of significant decisions like end-of-life medical care, how your assets are distributed, and naming a guardian for your minor children. These aren’t decisions that you want to be left in the hands of the Hawaii Probate Court.
Avoiding probate also means your family bypasses the time-consuming, expensive, and often invasive court proceedings following your death. We’ve all heard horror stories about families being torn apart by ugly legal battles following the death of a family member. A legally-binding estate plan reduces the likelihood of family conflict by specifying clear instructions on how your assets are divided and who’s in charge of executing your will.
Death and Taxes
Working with a trusted professional allows you to develop an asset allocation plan that minimizes the tax burden on your heirs. Your assets are potentially subject to both state and federal estate taxes, which can put a considerable dent in your legacy. But there are ways to reduce the amount of tax paid by transferring your wealth to your beneficiaries in advance of your death or by setting up a trust as part of your estate plan. A trust helps married couples take advantage of estate tax exemptions and can result in savings on capital gains. Not to mention, when you put your properties into a trust, they will not be subject to probate.
We all want to make sure our loved ones are well cared for after we pass. Having enough money to do that is just a start. Protect your legacy by working with a Honolulu Estate Planner to ensure your final wishes are granted.
Estate Planning of Honolulu is always ready when you are. If you don’t have a plan in place for you and your loved ones, contact Michael Madison for a no-obligation consult absolutely free.