3 Most Common Estate Planning Strategies

Estate planning…something we should all do, but most of us put it off. 

Do you think about your estate planning options?

60% of Americans have not gotten around to planning for the end of life. Though, the good news is that 81% of older folks, age 72 and up, have their estate planning documents in order. 

While many people think they are too young to worry about planning for what happens to their estate after their gone, it is beneficial to plan early. 

What will happen to your home, your stocks and bonds, your life insurance, and your personal belongings? 

Estate planning is different for each individual. What are the most common estate planning strategies used in 2019? Let’s look at three plans that are often used and see which one fits for you.  

The 3 Most Common Estate Planning Strategies

Having a plan for your estate and choosing your estate beneficiaries will give you peace of mind. Estate planning will ensure that your estate ends up where you want it after you are gone. 

Revocable Living Trust

A Revocable Living Trust is a popular estate planning strategy. It is called a living trust because you create it and benefit from it during your lifetime.

If your circumstances take a different direction at some point, no worries. The trust is revocable as it can be changed if you change your mind about anything or anyone named in the trust.

The living trust contains instructions regarding what happens to your assets after you pass. It also preserves your privacy. 

It differs from a will in that it avoids probate or the court handling of your estate. The court will not control your assets, so you will avoid expensive court costs and save time. 

This strategy can help you eliminate or at least lessen estate taxes by using credit shelter provisions. 

Last Will and Testament

In your last will and testament, you will name your estate beneficiary. It is a legally binding document that allows you, rather than the state, to decide what happens to your assets. 

If you have minor children at the time of your death, your will also names who will receive guardianship of your children. 

A will goes through probate and cannot be enforced until it is validated by the court. 

Beneficiary Designation

In this scenario, you choose a beneficiary to receive proceeds from your trust, life insurance, or IRA, for example, upon your death.

Two types of beneficiaries exist:

  • Primary – first in line to receive the asset for which they are named a beneficiary
  • Secondary – will receive the assets if the primary beneficiary is deceased at the time of your death

You should periodically review your designated beneficiaries as you experience life changes such as getting married or having a child.  

Which Strategy Will Work Best for Your Circumstances?

You have now learned the most popular estate planning strategies. Do your homework and get some advice on the best strategy for you and your circumstances.

Contact us with any questions you have or to schedule a consultation. 

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Facts You May Not Have Known About Estate Taxes

Thinking about passing on your estate to your children or grandchildren? 

You best cross your “t”s and dot your “i”s.

If you are thinking about passing on your estate, you have probably heard rumors about taxes. But what do they mean for you and your family? 

Here, we will dive into 5 fascinating facts about estate taxes so you have a better idea of what to expect. 

South Carolina Is an Ideal State to Pass Away In

Estate taxes vary from state to state. Some states enforce estate taxes, although the amounts change. Others do not enforce them at all. 

South Carolina is one of the states that does not impose either estate or inheritance taxes. Prior to 2005, the state had a “sponge tax” which took a portion of estate taxes given to the federal government. 

Now, however, the state does not impose any “death” tax. 

Other citizens are not so lucky and must pay careful attention to tax laws. Regardless of how carefully individuals have drawn up a will, inheritors may face stiff taxes depending upon location. 

Estate Taxes Do Not Apply to Most Americans

Put your fears to bed: the estate tax does not affect most Americans. In fact, you must be in the wealthiest tier of citizens to experience the tax. 

Prior to 2017, only 2 in 1,000 estates faced a tax. That number fell to 1 in 1,000 after exemptions doubled.

More than likely, the estate tax will not affect you or your family. Of course, that does not mean you should not partake in estate planning. 

Many Families Might Be Shocked in 2025

In 2025, exemption rates will drop to half what they are now, affecting estates worth approximately $5.5 million per individual.

Because the rates increased recently, many families assume the tax will not ever apply to them. The change may come as a nasty shock to many. 

This, again, is why estate planning is so important. Changes in tax laws mean individuals should update wills regularly, otherwise they may find themselves in a similar situation as actor Philip Seymour Hoffman’s family. 

Hoffman left his estate to his only child at the time he drafted his will but failed to update it after tax laws changed and he had additional children. Consequently, his wife and remaining children suffered. 

Other Countries Tax More

America has an estate tax rate at 40%. Does that sound steep? Not compared to some other countries. 

Japan has the highest rate of all at 55%. South Korea follows with 50% and France comes in third with 45%. 

America falls fourth in line when determining which countries have the highest estate taxes.

It Is Nothing New

The estate tax has existed for centuries. In fact, it was common during the medieval era. 

During this period, kings demanded payment in the forms of “reliefs” from heirs who received property. It was from this notion that many European countries created the idea of inheritance and estate taxes. 

Protect Your Family’s Future

Estate taxes may not concern you. However, it is important to understand the changing laws regarding wills, property and more so that your family is secure. 

Changes in your personal life as well as in the government may have unforeseen results, which is why our professionals are available to help. We will ensure your family is protected from these changes, and we will work to create an estate plan that reflects your legacy. 

Call us today to discuss strategies and to secure your family’s future.  

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5 Facts to Help You Understanding the Importance of Estate Planning

5 Facts to Help You Understanding the Importance of Estate Planning.

When is the last time you stayed in a castle?

That is the first thing you picture when someone starts talking about their estate, right?

It would be nice if we all had several million dollars and a boat to leave for each of our kids. But you do not need to be on a first-name basis with Bill Gates to start deciding what to do with your assets in the event of your death.

We have put together these five important facts to help you understand estate planning. Life is unpredictable, and you do not want to leave your family unprepared.

Keep reading to learn more.

You Have an Estate Even if You Rent

Your estate is everything you own and all the financial information attached to your name.

The word “estate” usually sends people daydreaming about mansions and golf courses. But if you own a car and have a bank account, those count as part of your estate, legally speaking.

Even if you are still working your way out of debt and renting an apartment, everyone has an estate worth planning.

Your Will is Just the Beginning

Estate planning is a detailed process that takes time. It is not just one document, and there is so much more to plan besides which kid gets your novelty coin collection.

Planning an estate typically includes:

  • Assigning financial power of attorney
  • Assigning medical power of attorney
  • Creating advance directives for your healthcare
  • Putting aside money for funeral expenses
  • Creating a living trust

Do not stress! Start slowly with a will, and keep scheduling the time to add more as you keep thinking about what you want.

If You Do not Decide, Uncle Sam Will

Anyone who dies without a will or any kind of estate planning leaves the future of all of their assets to the state government.

This does not mean the state government takes everything you have. But it does mean you have no way of knowing which relatives will get what.

It is Not as Expensive as You Think

You do not have to spend a fortune to plan your estate.

Though there are legal fees involved with filing these documents, paying ahead of time reduces expenses for your family after your death. While you are spacing out appointments to estate plan with your family lawyer, you will have time to save up for these fees.

You Are Never Too Young to Start

Estate planning is not just for AARP members.

Because estate planning is a process, the sooner you start, the better. And while death is not a light-hearted subject, it is still a significant financial event you need to be prepared for.

Think of it as investing in your future and investing in your family. The sooner you start the estate planning process, the more time you will have to figure out every last detail.

Still Do Not Understand Estate Planning?

For even more information to help you understand estate planning, check out more from our blog.

Better yet, do not wait.

Schedule a consultation with one of our skilled estate lawyers today.

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5 Helpful Tips of Estate Planning so You Don’t Pull Your Hair Out

Nobody enjoys thinking about their mortality, and sorting through legal documents is not what most people would call a good time. This hesitation makes sorting through legal documents about your eventual death seem dangerously stressful and, perhaps, dull.

That is probably why half of us do not have a will of any kind.

Relax. We have got some tips that help take the stress out of preparing for your future.

Keep reading to learn five essential tips of estate planning.

Know Your Worth

The most essential first step of estate planning is doing an inventory of all your assets.

Your total estate worth is so much more than just land you own. Any retirement fund, life insurance plan, Roth IRA, stock investments, collector’s items, and even your debt count as part of your estate.

Keep a detailed account of all your debts and assets in a safe place with the rest of your estate planning documents. Wherever you decide to keep these documents, make sure your family can quickly get to them.

Lawyer Up

The next thing you will need is an estate planning attorney. They will be able to help you navigate things like property taxes and drawing up your will.

Speaking of attorneys… Identify who you want to have power of attorney over you medically and financially.

Okay, so having power of attorney does not make you a lawyer. But whoever you assign power of attorney will be able to make decisions for you if you become unable to make those decisions for yourself for any reason.

Ex: If you are rendered unconscious in an accident, someone needs to be able to give consent for critical medical procedures.

Where There is a Will…

Your living will and last will might be the most important parts of your estate planning.

A living will is also called an advance directive. It gives detailed instructions for your medical and financial power of attorney, so they know how to meet your needs best while you are still alive.

Your last will and testament give detailed instructions for what to do immediately following your death.

Plan Your Funeral, So They Do Not Have To

One of the most helpful tips of estate planning is putting money aside for your funeral arrangements in advance.

Do you want to donate your organs to people who need them? Would you prefer to be buried, or cremated?

Spell out your preferences, so your family has less to worry about.

Trust Your Beneficiaries

You get to pass on everything you own to the people you love two different ways:

With a trust; this dictates exactly who gets your property without going through a public court. Your trust determines who gets your car, your house, etc.

The people you name as beneficiaries will inherit the assets you own that are not physical pieces of property; including, bank balances, stocks, investments, etc.

More Tips for Estate Planning

For even more helpful legal information and tips of estate planning, stay tuned for more updates on our blog.

Do not be shy. Ask for a consultation with one of our skilled legal professionals today.

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4 Reasons Why Choosing Beneficiaries is a Good Thing

Having a family is one of life’s greatest joys. There is so much to look forward to — graduation, marriage, grandkids. Of course, these things require a lot of financial planning like 529 savings plans for college, or trust funds.

One thing we hate to think about, however, is how to plan for our loved ones’ financial well-being when we pass on. One of the ways you can make sure that your loved ones are taken care of is to set up beneficiaries for things such as life insurance and your estate.

Want to learn more about choosing beneficiaries? We have got you covered. Read on to learn about the reasons for selecting beneficiaries!

It Gives You More Control

You have control over your financial assets now, why would you not want control over their distribution when you pass on? 

If you pass without having a will or beneficiaries set up, then it is ultimately up to your next of kin to decide how to divide up your assets. In the event that there is a dispute over who should get what, then it will be up to a judge to make that decision.

Choosing beneficiaries now ensures that you are in complete control of your assets.

Choosing Beneficiaries Makes Distribution of Assets Less Stressful

We want to think that our family will be able to divide up assets in a civil manner. Unfortunately, that is not always the case. The stress of the loss of a family member and dividing up their assets can do a lot of damage to relationships.

By pre-planning who gets what, your loved ones can avoid the stress and hurt feelings of dividing up your assets. 

Your Beneficiaries Can Avoid a Lengthy Probate Process

Probate is a notoriously long process by which the executor or administrator of the estate manages the assets of the estate to make sure that all assets are collected, debts are paid, and all property is distributed. Probate is more complicated when there is not a will, or an existing will needs verification.

Not all property must go through probate. Most states will allow a certain amount of your estate to get passed on to your loved ones without going through probate first. Life insurance policy payouts can bypass the probate process entirely so long as there are designated beneficiaries.

Peace of Mind

If nothing else, setting up beneficiaries will give you the peace of mind that you have done everything that you can to make sure your loved ones will continue to prosper, even if you pass.

Estate planning may not be a fun thing to think about, but it is still incredibly important if you want your loved ones to enjoy financial stability after you pass on. When it comes to estate planning, it is never too soon to get started.

Ready to Set Up Your Beneficiaries?

Choosing beneficiaries for your estate and insurance is an incredibly important step in planning for your family after you pass on. Not only does it give you control of who gets what portion of your policies and estate, but it also prevents tension among family members.

Ready to start planning for your family and loved ones after you pass on? We can help guide you through the process. Contact us today to see how we can help you!

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