“Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn’t as hard as you might think.” — Suze Orman
Contrary to popular belief, estate planning is not reserved for affluent families—it’s a tool for anyone hoping to protect what they’ve built over the course of their lives and, more importantly, their loved ones.
The term may seem complicated or intimidating, but really, estate planning is simply a process of arranging how you’d like your assets to be distributed and administered once you’re no longer able to do so. Whether it’s a business, accounts, cash, real estate, or even your favorite painting, an estate helps your assets go where you want them to.
A proper estate plan, like a strong retirement plan, should adapt to your circumstances as they evolve. But before you update one, you have to start somewhere. Here are a few ways to get going and how they can relieve your family and heirs during a difficult time by keeping your financial affairs in order.
Estate Planning Potential Benefits
- Tax exemptions or reductions
- Support loved ones
- Designate guardianship
- Outline inheritances
- Avoid family conflict
- Wealth preservation
- Business succession
- Philanthropic giving
Save on Estate Tax in Texas, Pay Your Family & Beneficiaries
One of the most attractive features of estate planning is the financial benefit it entails—although Texas has no state level tax levied against your estate, there are still federal taxes to be paid as well as any related costs when it comes to inheritance. Probate fees vary based on several factors, but regardless of the rate, they can eat into the value of your estate and what you can leave behind. These fees can be reduced—or even eliminated—by life insurance policies, pension plans, revocable living trusts, transfer on death deeds, and other methods, leaving more for what matters most.
Trusts can mitigate these death-related taxes, but they may not be suited for everyone. If you’re considering going this route, it’s recommended that you use an estate planning attorney or specialist to help you identify the proper structure and legal documents needed.
Your Wealth, Your Wishes, Your Directive
Financial benefits aside, estate planning provides agency and peace of mind. It’s effectively the only way for Americans to dictate exactly how they would like their assets to be distributed after death. Without the proper documents in place, the government decides how everything unfolds, which may strain relationships between family members. If you worked your whole life to build your wealth, it’s only fair that you decide how it’s passed along.
Guardianship for Dependents
Another misconception about estate planning is that it’s only important in the later years of life. Life is precious, but also full of uncertainty. For families with minor children, tragedy can leave a dependent without their parents. If a formal will isn’t available, the court system decides where they end up. Estate planning, however, allows parents to appoint a legal guardian as a precaution. It may be difficult to think about, but parenting isn’t meant to be easy—it’s meant to be fulfilling and giving your children the best life possible.
Insuring Against Incapacity
Similarly, the reality is that if you become incapacitated, there isn’t much that can be done about it by the time it occurs. Whether due to an accident or medical emergency, individuals can be rendered incapable of making sound decisions at any point in their lives. Designating a durable power of attorney in your earlier years may be intimidating, but it serves to protect you, your wealth, and your loved ones by granting them the ability to make decisions and act on your behalf if you are unable to do so.
Here to Help Your Estate Planning Process
This document was never intended to be an exhaustive list of all the benefits that estate planning can provide. It’s a conversation starter, a thought provoker, and a jumping-off point. Each estate plan is entirely unique to the individual and those they value most.
But here’s the one aspect that applies to everyone equally: it may eventually be too late to plan for the future, but it’s never too early to start. Take this to your financial adviser, ask questions, and find answers about how you can leave behind a legacy that lasts for generations, not just years.
DISCLAIMER
Promus Advisors, a SEC registered investment adviser, is an affiliate of Bellwether Investment Management, Inc. (“Bellwether”). Promus Advisors provides feebased asset management and advisory services. Bellwether and Promus Advisors have entered into arrangements in which Bellwether may refer clients with financial advisory needs to Promus Advisors. Please note that SEC registration does not constitute an endorsement of the firm by the Securities and Exchange Commission, nor does it indicate that the adviser has attained a particular level of skill. Promus Advisors and its investment adviser representatives are in compliance with the current filing requirements imposed upon SEC registered investment advisers by those states in which Promus Advisors maintains clients. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable, equal any corresponding performance level(s), or be suitable for any specific client’s portfolio. Promus Advisors does not guarantee that any benchmark or indices used by Bellwether will match a given portfolio. Furthermore, asset allocation and/or diversification does not necessarily improve an investor’s performance or eliminate the risk of investment loss.
