The Planning Process: Estate Planning

Estate Preservation Strategy

Anybody who has worked hard, saved, and invested needs an estate preservation strategy. A good one can help ensure that your assets are protected and loved ones cared for in the future. One of the best reasons to preserve an estate is to honor what you’ve done. People don’t want everything they’ve worked for in their lives to have no value in the future.

Estate preservation strategies vary greatly. Each must address the unique financial situation of the individual for whom it was crafted. Admittedly, some estate issues are complex. However, your financial professional is readily available to deal with every imaginable issue and can be invaluable in creating an estate plan—a formal roadmap to safeguarding your finances and possessions.

When should you develop an estate preservation strategy? There is no “right” age—but delay is unwise. It’s best to start early but, unfortunately, few people do. For example, 70 percent of Americans don't have a will.1 Reasons for delay vary. Many of us lead hectic lives. Others are uncomfortable discussing a time when they won’t be here. Still others want to avoid dealing with complex financial and legal issues.

While these factors are understandable, they’re outweighed by the benefits of having a sound estate preservation strategy. These include reducing estate taxes, allowing for a timely resolution of your estate and ensuring assets are distributed and protected according to your wishes. In addition, a strategy guarantees that, if you’re unable to make them, financial and health care decisions reflect your desires. While differing greatly from person to person, estate strategies typically are developed using a similar process.

The first step is to find expert assistance. A good team of advisors—including your attorney, financial professional, accountant, insurance agent and investment advisor—is essential. Once a team is assembled, start setting goals. Answering two questions will help:

How much money will you need for your lifetime?

It’s most important when goal setting to ensure you have enough to live on. This is known as the “necessary estate.” Without determining how much you will need for the rest of your life, and knowing that you are comfortable, you can’t move on to preparing an estate plan. Pinpointing your necessary estate and thus your “excess estate”—the money you won’t need—is more likely to lead to good decisions.

Where do you want your assets to go?

There are really only three places: heirs, charity or estate taxes. So, think carefully about the first two categories and, if this meets your objectives, do all possible to reduce the effect of the third.

After establishing goals, work with advisors to create a formal estate plan. This provides both a vision of the future and a path to get there. Estate plans can have many elements. However, almost all contain a few basics, such as:

  • A will. This is the most basic and necessary of all estate documents. It determines where assets go.
  • Health care power of attorney. This document spells out who will make health care decisions for you, if you cannot.
  • Financial power of attorney. This identifies who will make financial decisions, if you cannot.
  • A trust. Trusts come in many different forms. However, one of their chief functions generally is to protect assets. They also can avoid the delays and costs associated with probate. Trusts are not for the very rich alone, but can serve the needs of a wide range of people.

Once an estate plan is completed, be sure that all assets are titled so they reflect what’s in it. If they aren’t, the plan could be ineffective, confusing and counterproductive.

Remember that estate plans are not static. Tax laws are revised. Property is bought and sold. Marital and family statuses change. Objectives change. These events and others can affect a plan. So, monitoring is important. Annual—or even quarterly—reviews are appropriate.

While estate strategies often focus on personal assets, business owners also should safeguard their commercial interests. Without a plan, part or all of a business may have to be sold to pay estate taxes. Address business needs at about the same time that you deal with your estate. Consider drafting a succession plan that speaks to long-term management and ownership.

Finally, leave a paper trail. Write a list that covers all your assets and liabilities. Put that in a safe place with all your important documents, especially those related to your estate plan. Make sure that people you trust know where the list and papers are located.

1 “You need a will—even if you’re not “rich.” 02/04/19.

Our Location

David R. Henze

101 Plaza East Boulevard, Suite 116
Evansville, IN 47715
ph: 812.473.7200

Latest News

Financial and Economic Brief - January 1, 2022

• How the Money Supply is Looking as we Turn Over the Calendar – The threat of ongoing inflation may be a result of the US Government and supply chain shortages.

• Shifts in the Paper and Pulp Industry Target 2022 as a Banner Year – The printing industry has been virtually decimated by technology in the form of email & downloadable brochures.

• 5 Steps You Need to Take If Planning to Retire in 2022 – Once you make the decision to retire there are several very important steps that potential retirees should consider.

Financial and Economic Brief - December 1, 2021

• Projected Growth for the US Economy in 2022 – Many economic pundits provide annual projections for the coming year.

• Are the Oil Companies Making Huge Profits While Americans Feel the Pain at the Pump? – Ask friends, family and neighbors about how much it is costing them to fill-up that SUV at the petrol station.

• The New IRA Contribution Rates Are Out for 2022; You’ll Be Happy to Know There Are Many Increases – The IRS has recently released the new IRA contribution rates and limits.

Financial and Economic Brief - November 1, 2021

• Current Status of Electric Vehicles in the US – In spite of the hype that seems to permeate around electric vehicles in the US, the current numbers are less stellar than one might think.

• The Rising Costs of Everything – What We Need and What We Love – Economists are raising an alarming inflation scenario that America has rarely seen before.

• The Economic Outlook for the Chinese Economy – After decades of double digit growth in GDP, the Chinese economy is beginning to show signs of slower growth.

Financial and Economic Brief - October 1, 2021

• Is the Rising Price of Oil a Reflection of Higher Demand? – Even with some pundits pushing the “Green New Deal”, consumers are still loving gas powered vehicles.

• The Revolution of Fast Food Restaurants using Robotics and AI is Upon Us! – The dilemma the fast food industry faces is the inability to hire enough for food prep. & clean-up even with a min. wage of $15/hr.

• The Fed May Now be Poised to Raise Interest Rates – We should think twice when trying to guess what the Fed will do with interest rates in 2022 & 2023.

Financial and Economic Brief - September 1, 2021

• A $3.5 Trillion Budget Spending Bill - PASSED the House – The House has narrowly passed a huge budget while also cementing in a date to pass a $1.5 trillion infrastructure bill.

• What is the Future of the Pharmaceutical Industry? – The worldwide value of the pharmaceutical is approximately $1.2 Trillion.

• 2021 Year-end Tax Strategy – Get a jump on filing your income taxes as early as possible this year since there have been many tax changes resulting from new tax legislation.

Financial and Economic Brief - August 1, 2021

• 2021 Q3 – The latest Economic Forecast? – Some economists and other pundits are forecasting a robust Q3 and Q4 for 2021.

• “For the 99.5% Act” strategically introduced by Senator Bernie Sanders – Recent legislation proposed by Senator Bernie Sanders will severely impede the estate planning efforts of many Americans.

• The E-Vehicle Revolution – When the Internet started, many didn't believe it would have unprecedented influence that took place over such a short period of time.

Request Information

Please let us know how we can serve you.