Thinking the Unthinkable: What Everyone Needs to Know about Estate Planning
Did you know you already have an estate plan? The only question is whether it is the estate plan you want -- the one that's best for you and your family.
Anyone who owns assets has an estate, whether those assets fill a 50-room mansion or a shopping cart. Upon a person's death, those assets must, by law, be properly distributed. Exactly which assets are distributed to whom depends on the estate plan.
Without proper planning, a court could determine their distribution in accordance with state law, which may not fit the wishes of the deceased.
This brochure, prepared by the Financial Planning Association, shows why you need an estate plan and highlights some of the basic components of an estate plan.
A CFP professional, working in conjunction with your estate planning attorney, can help you design a sound, cost-effective estate plan that complements your overall financial circumstances.
Why you need an estate plan
Many people assume that estate planning is only about saving estate taxes. Consequently, they often ignore estate planning because they assume that their estate is too small to be taxed. Yet increased home values, larger life insurance policies and larger retirement accounts often make estates more vulnerable to taxes than their owners may realize.
Furthermore, many families assume that because Congress has reduced federal estate taxes -- and may permanently eliminate them -- they either don't need a formal estate plan or they can delay work on one. Regardless of what Congress ultimately decides regarding federal estate taxes, many estates -- even modest-sized ones -- will remain vulnerable to state inheritance and estate taxes.
But the main reason that everyone needs an estate plan is that it is much more than about taxes.
The Financial Planning Association' connects those who need, support and deliver financial planning. We believe that everyone is entitled to objective advice from a competent, ethical financial planner to make smart financial decisions. FPA members demonstrate and support a professional commitment to education and a client-centered financial planning process.
The elephant in the living room
Despite the benefits, estate planning is, for many families, the elephant in the living room that everyone avoids talking about. There are several reasons for this, including:
* Many don't want to face a subject that ultimately is about mortality
* It may dredge up family conflicts
* Many don't want to talk about money with their heirs
* Parents don't want to spoil the kids with money or don't trust their kids with money
* Many are hesitant to invest time and money into developing an estate plan
But the elephant will not go away. …