ESSENTIALS OF ESTATE PLANNING

By Cory Howes

cory-(1)When people hear the term “estate planning,” many immediately think of estate tax planning. Others think “get a Will” and that is all they need. While planning for estate taxes is important for those potentially subject to an estate tax, and a Will is an important component of an estate plan, estate planning involves many other important issues that are much more common that an estate tax problem and more involved than simply “getting a Will.”

In this multi-part series on the Forrest Firm blog, we will review several major categories of issues that you should address through comprehensive estate planning. Whether you are single, married, divorced or widowed, and no matter the size of your estate, there are common estate planning issues that everyone should address.

Generally speaking, estate planning is the process of managing and controlling your property while you are alive and well, planning for yourself and your loved ones if you become incapacitated, efficiently transferring your property to your beneficiaries upon death, and protecting your loved ones and their inheritances after you are gone.

Essentials of Estate Planning

We like to break estate planning down into a few basic categories that are applicable to everyone:

• Incapacity Planning
• Basic Asset Protection Planning
• Wealth Transfer Planning
• Beneficiary Protection Planning

Then, there are multiple areas of estate planning that are quite relevant to some people:

• Advanced Asset Protection Planning
• Estate Tax Planning
• Charitable Planning
• Business Succession Planning

In our minds, the first list is universal, in that everyone needs to think about issues in life and death, particularly as it pertains to their health and property. While the second list isn’t universal, it’s particularly important in the context of business owners and those that accumulate significant, diverse sources of wealth. For this second group, the first list is foundational, while the second list is pivotal to achieving optimal transfer of assets and align the estate with business exit strategies.

Working with an Attorney

It is important to note that not all legal documents are created equal. For example, the power of attorney is prevalent in multiple areas of estate planning. There are many powers that can be granted in a power of attorney, and depending on your family and assets, you may want to grant some and not others. There are some powers, such as gifting powers that are often overlooked or inadequate.

Likewise, many financial or healthcare powers of attorney grant authority to an agent but do not include any instructions or guidelines for the agent. We strongly suggest you work with an attorney who focuses on estate planning to ensure your documents meet the specific and personal needs of you and your family.

The Forrest Firm is focused on assisting entrepreneurs and executives in meeting business opportunities while mitigating challenges with proper attention to risk. Estate planning is a powerful tool that business owners can use to protect their hard-earned assets and align their personal affairs with their corporate goals. If you have questions regarding any aspect of estate planning, we would welcome your call.

Stay tuned for our next installment, focused on the key areas of Incapacity Planning and Basic Asset Protection Planning.