Estate Planning: The Gift That Keeps on Giving!

Many people view estate planning like a trip to the doctor:  something to be avoided for as long as possible.  Such a delay can be disastrous in both cases. 
 
Estate planning is the perfect opportunity to plan and control our lives and to help ensure the well-being of loved ones.  The National Network of Estate Planning Attorneys offers a wonderful definition of estate planning:
 
I want to control my property while I am alive and well, care for myself and loved ones if I become disabled, and be able to give what I have to whom I want, the way I want, when I want, and, if I can, I want to save every last tax dollar, attorney fee, and court cost possible.
 
Why is estate planning so important?  To answer this question, we need to understand its underlying purposes.  As suggested by the definition, there are lifetime and death objectives associated with estate planning.
 
Keeping in mind that each of us has a lifetime estate, this week we will discuss lifetime objectives.  Here are four worthy of careful attention:
 
Replacement Income:  Since most people work to enjoy a decent standard of living, it only makes sense that we ensure the continuation of that standard during retirement or disability.  These events are different in that disability is usually unforeseen, but a failure to plan for either may disrupt normal living patterns…and…frustrate future plans.
 
Avoidance of Income and Gift Taxes:  While most individuals focus exclusively on ensuring adequate replacement income, some possess significant wealth and must be concerned with minimizing tax consequences.  Despite an increasingly hostile tax environment, several techniques remain available.
 
Improving One’s Investment Package:  The simple act of listing all of one’s assets and liabilities in pursuit of estate and income tax savings often provides an individual with the first comprehensive review of his or her investment portfolio in years…or ever.  Inconsistent or unfavorable property ownership patterns may also come to light.
 
Appointing Financial and Healthcare Agents:  Certain disabilities can render an individual unable to make his or her own decisions regarding personal finances and healthcare.  The results can be disastrous, expensive, and life-altering.  Estate planning provides an opportunity to maximize control over your personal and business circumstances should you become unable to do so. 
 
Next week, we’ll address seven important death-related estate planning objectives.  Stay tuned!

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