This information is derived from Rehmann’s Private Client Advisory (PCA) experience, a uniquely tax aware approach to growing and protecting wealth through a team of specialists curated for each PCA client’s needs.
Did you know that you have an estate plan — even if you haven’t made one? By default, if you die or become incapacitated without an estate plan, your state’s intestacy laws become your estate plan. That means your assets will be decided through probate, a judicial process that can be intrusive, expensive, public, and often spark discontent among beneficiaries.
If you don’t like the idea of the courts making decisions for you, you should take control, make your own choices, and document them in a formal plan. (A will, by the way, is not enough. It is one part of an estate plan, the legal documents that spell out how you want your financial affairs and medical care handled if you’re unable to make those decisions for yourself.)
If you have made a plan, review it regularly and update accordingly. Maybe your family dynamics have changed through marriage or divorce, or there has been a birth or death since you last looked at your estate plan. Perhaps someone you expected to take over your business has stepped aside or is no longer capable. Like any other long-term plan, estate plans need to be reviewed in light of your current circumstances to ensure they hold up to the test of time.
That’s why it’s so important to work with a proactive professional advisor; he or she will not only help you develop a plan that not only reflects your wishes and meets the needs of your loved ones but also evolves with you through every stage in life.
Complex Issues Require Thoughtful Attention
Growing Children & Assets
Identifying beneficiaries and how they receive wealth is an ongoing process that considers relationships, ages, and more. For example, if assets will be transferred outright to your child or grandchild, is the beneficiary of age and mature enough to manage the wealth? How about the amount of money that you’re transferring? For a lot of people, the value they’ll transfer changes significantly over time. Because those changes require critical decisions, a regular review of your balance sheet should also be a part of your planning process.
Business Ownership
Decisions for business owners can be even more challenging. Do you want your business partner to work with the beneficiary of your estate? Would it be more beneficial to establish a process for your partners to buy out the shares from your estate. If you’re the sole owner of the business, you have a range of options to weigh, as well. Understanding and quantifying each available option is essential to gaining full clarity so you can make the right choices for you. Read more about smart estate planning moves for business owners.
The Family Cottage
Over decades, family vacation homes build cherished memories … and substantial wealth. Choosing whether to gift that home or pass it on as part of your estate is a key aspect of your plan and which you choose has very different tax consequences. Plus, owning the property may appeal to some but not all family members. Who will use the home and when? Who will pay expenses to maintain and manage it? What about property taxes? And who will decide when to sell and at what price? An estate plan can address these questions to avoid disagreements in the future.
The Takeaway
Estate planning involves more than just drafting a will. It encompasses decisions about your assets, healthcare, and finances that matter far more than commas and zeros on a balance sheet. It’s about creating a thoughtful plan that reflects your wishes and — when done right —evolves with you through every stage of life.
Rehmann can help you design and update an estate plan that ensures your wishes are fulfilled, your legacy is protected, and potential tax implications are minimized. We surround our clients with a network of trusted advisors who take the time to understand the nuances of your estate. Learn more here: https://www.rehmann.com/solutions/estate-and-legacy-planning/
Contact Mark Meyers, a Rehmann principal and wealth management advisor, at [email protected] or 248.614.6432 for personalized assistance and advice. Effective life planning requires a holistic approach.
Securities offered through Rehmann Financial Network, LLC, member FINRA/SIPC. Investment advisory services offered through Rehmann Wealth, a Registered Investment Advisor.
