According to American financial advisor, author, and podcast host Suze Orman, “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.”
For example, older Americans are particularly positioned to consider a lifetime’s worth of assets and how to successfully transfer them to family members.
Or, for small business owners, estate planning services ensure the smooth operation of the business as it’s shared by partners or family members.
Estate planning is a broad category that includes wills, healthcare and/or financial powers of attorney, living trusts, and other asset control documents.
The truth is, the question of whether or not to hire an estate planning lawyer is one that many people should be asking themselves in order to reap the benefits of preparation.
Estate planning statistics that prove its effectiveness
For those thinking to hire an estate planning lawyer, consider the following national statistics as revealed by Legal Zoom:
- Estate planning activity has for the most part decreased over the past decade — from more than 50% of Americans having a will in 2005 to approximately 30% having one today.
- The percentage of Americans with wills continues to decrease — with just 44% having a will in 2016 down from 51% having one in 2005, and 30% of Americans don’t even know if their parents have a will.
- The following represents what percentage of each age demographic have a will:
- 14% of Americans between the ages of 18 and 29.
- 35% of Americans between the ages of 30 and 49.
- 56% of Americans between the ages of 50 and 64.
- 68% of Americans 65 and older.
- Older Americans are more likely to encourage their loved ones with COVID-19 to create wills or estate plans — with 45% of Americans between the ages of 18 and 24 saying they would agree, compared with 58% of those 65 and older.
And, finally, 71% of Americans say that having an estate plan in place would make them feel like a responsible spouse or parent.
Estate planning benefit #1: Protect assets
The primary benefit to having an estate plan drawn up and set into motion is that it’ll help to protect a lifetime’s worth of assets and make sure they’re eventually distributed to the proper beneficiaries..
Forbes outlines three estate planning techniques that can be used to protect assets from creditors:
- Funding a protective trust at death to provide for a spouse or children — the trust asset protection provisions effective for trusts include several mechanisms for favorable control
- The transfer of assets in return for interest in an LLC or LLP — because once those assets are transferred into the LLC, creditors have limited rights to gain access to them
- A transfer that exchanges for an annuity that protects the principal from claims of creditors — Private annuities are very similar to insurance company annuities, and do protect the principal against attachment
Very few financial vehicles offer the same degree of asset protection that are common to estate planning agreements.
Estate planning benefit #2: Minimize expenses
The second major benefit of creating an estate plan is to minimize the expenses that most likely will be incurred by responding to state directives to meet the definitions of assets and beneficiaries.
It helps to remember that at some point, the declaration of assets and beneficiaries will be done – with or without an estate plan.
But “with a will” has the potential to be much cheaper in future estate costs, especially by following these tips from Kiplinger:
- Update all beneficiaries — Make sure that assets are passed along to their intended recipients
- Cash in bonds and stocks — Resolving physical bonds and stock certificates to keep them from being forgotten
- Examine all deeds — Allowing a trustee to list the property for sale instead of getting caught up in a lengthy probate process
- Consider consolidating accounts — Fewer accounts means fewer work and less legal fees, which is good for all involved
- Keep track of beneficiaries — Use a secure catalog of family members, addresses, and account numbers for easy bookkeeping later
Estate planning benefit #3: Reduce taxes
And, finally, the third benefit to estate planning is the ability to significantly reduce the so-called “death” tax obligations using smart control of the assets of the deceased.
Using a few advanced methods of estate planning can help you to reduce state taxes and let you maintain an income stream for life.
- A Family Limited Liability Company offers not only an estate tax reduction, but asset protection, as well.
- Married couples can create Spousal Lifetime Access Trusts, or “SLATs,” for the benefit of one another to take advantage of annual exclusion gifts and their lifetime gift tax exemptions.
- Creating a charitable trust, such as a Charitable Remainder Trust, not only gives you a charitable income tax deduction when the trust is funded, but it gives your estate a charitable estate tax deduction after you die
- A Qualified Personal Residence Trust allows home residence for a period of years, then for estate and gift tax purposes the home will pass to beneficiaries at a reduced value
This is one of the primary ways to hire an estate planning lawyer and avoid paying outrageous inheritance taxes.
Hire an estate planning lawyer to protect your assets, minimize your expenses, and reduce your taxes.
The experienced team at Dishowitz law is ready to help you evaluate your financial health and custom create an estate planning portfolio to protect everything you value in your life–contact us for your free case evaluation.
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Dishowitz Law provides counsel to hundreds of individuals, families, and businesses involved in complex legal disputes, including estate planning, probate, estate disputes, general litigation, and landlord-tenant law.
For more information, call (855) 236-3474, email bdishowitz@sflalaw.com, or visit https://dishowitzlaw.com/contact/.