Whose Estate Plan Do You Have?

by Brian Watson

Estate planning is a topic you hear about often, but do you understand why it is important?  Everyone has an estate plan, whether they know it or not. When someone has not specified their wishes, their plan becomes, by default, the government's plan. The main thing is for you to understand what is at stake, understand your options, and make your wishes a reality.

There are four goals to almost every estate plan. Most plans are designed to transfer as much as possible, to the right places, as efficiently as possible...all while maintaining flexibility in case of change in the individual's situation or goals, or in tax laws.  Each individual situation will have unique characteristics, but almost all estate plans will cover these four goals:

• The first goal of most estate plans is to transfer as much of the estate intact as possible. Assets subject to the probate process will be subject to attorneys' fees and court costs of 3 - 5 percent of the estate value.  Estates above $1,500,000 may be subject to estate taxes close to 50 percent. Proper planning can eliminate these unnecessary expenses.   
  
  
• The second goal of most estate plans is to transfer the assets to whom you want. If you had a choice between your family, a charity, or the government, whom would you choose?  Most people would say their family and/or a charity. Without proper planning, your plan (by default) may bequest a large portion of your estate to the government. If minors are involved, you must name a guardian for your children. You also must name someone to manage the assets for your children.
  
  
• The third goal of most estate plans is to transfer the assets as efficiently as possible.  If you have assets you want a son, daughter, or grandchildren to receive, do you want them to receive the assets smoothly, or to endure delays and headaches? If you have not done any planning, you may have unknowingly chosen for your loved ones to have to endure unnecessary court hearings, delays, and headaches.
  
  
• The last goal of most estate plans is to maintain flexibility. Over the remainder of your life, your situation may change, your estate planning goals may change, your financial needs may change, and tax laws may change.  Estate plans are not supposed to be set up once, then forgotten. Like an investment portfolio that must be monitored and rebalanced, an estate plan must be reviewed and updated as needed. 

Estate planning is not needed because you will die someday; it is needed because those you care about will live.

You can either use the estate plan the government has for you, or you can have a financial advisor and estate-planning attorney work together to develop one for you. Have them take you through a planning process to determine your goals, to help you understand your options, and to develop the most efficient and flexible plan that will accomplish your goals. Remember, not having a plan is a decision. You can either choose the plan the government has for you...or develop your own.  The choice is yours.

Brian Watson
Koss Olinger Financial Group
2700-A NW 43rd St
Gainesville, FL 32606
(352) 373-3337
brianw@kofinancial.com

Prosperity Partners, Inc.
800-868-6230
JasonR@ppicash.com