Top Reasons People Need Estate Planning

By: Jim Dossey, MS, MBA, JD

There are countless reasons that estate planning is important, but some of the top reasons include:

  1. Avoiding chaos / discord among those left behind
  2. Minimizing estate taxes -- currently, the estate tax exemption is $5.43 Million. If the size of your estate approaches or exceeds that amount, you should consider planning to ensure your heirs do not get hit a 40% estate tax rate.
  3. Avoiding probate -- here in Texas, probate is not a painful or expensive process. However, if you have assets outside of Texas, you should consider trusts to avoid out-of-state probates.
  4. Protect children from mismanaging their inheritance -- sometimes "how" assets are inherited is just as important as "what" is inherited.
  5. Asset protection for beneficiaries -- through proper planning, you can ensure the assets you leave to your beneficiaries are creditor protected and sheltered from bad marriages.
  6. Business succession and exit planning
  7. Concerns about outliving their retirement
  8. Asset protection for self
  9. Providing for a spouse who is incapacitated or terminally ill
  10. Providing for a special needs family member
  11. Ensuring that philanthropic / charitable gifting goals are met
  12. Business formation and entity planning
  13. Coordination of beneficiary designations on life insurance and retirement plans with your estate plan
  14. Recent marriage / divorce or other change in personal life circumstances
  15. Disaffection, disability, or death of an executor or agent named in a previously executed estate planning document
  16. Changes in tax law. For example, any Will containing a Bypass Trust drafted before 2013 (aka credit shelter trust) should be looked at to see if that estate plan still makes sense. See my blog on this topic here.

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