Many people are being lulled into complacency thinking they don’t have to update or do estate planning because exemptions are so high that there is ‘no’ tax issue.
This may not be quite true for two major reasons. One: this benefit automatically expires in a few years. Two: the state of Illinois has its own inheritance tax with the much lower exemption of four million dollars — still a high exemption, but if not planned for correctly, could result in taxes when the first death occurs. And with exemptions where they are, there is a window of opportunity to pass wealth without tax that has not existed before. More importantly, aside from taxes, there are many other reasons to properly plan your estate and there are many different ways to get the results you want.
Essentially, the goals are pretty universal for most folks…
For Themselves — Protection and Control. They want control over their assets and health care decisions, financial security and to be protected from things like lawsuits, disability and the cost of long-term care.
For Their Surviving Spouse — Financial Security. If they predecease their spouse, they want the spouse to be protected from taxes (especially income tax) and to make sure their hard earned money doesn’t go to a new spouse.
For Their Children and Grandchildren — An Education, Financial Security, and Asset Protection from Lack of Maturity, Divorce and Lawsuits. Many feel that, should they be able to leave anything to their kids, they want what they leave to be protected from gift, estate and income taxes for as long as possible, even for several generations. They have a philosophy that includes a work ethic, integrity, faith, and appreciation and respect for family. Above all, they want their family members to love each other, spend time together and avoid conflict. They want them to benefit from the wealth that is left to them, not let the money ruin their lives.
For Their Business or Farm. They want their business or farm to pass to family members who desire to own and operate it, and treat non-family key employees fairly, or they want to sell it to employees or outsiders. They want to make sure they attract and keep talented, high quality employees and be protected from frivolous lawsuits.
You are the only one that can craft that legacy that can impact generations. The methods you use to accomplish your objectives are many. So the legacy you leave, what really matters, is truly a legacy that extends far beyond the money and property to the people and causes you love.
Leave A Comment