Estate Planning Basics

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What is an estate plan? Simply put, it’s a map of how you want your personal and financial affairs to be handled in case of incapacity or death, and the subsequent implementation of the strategies that will fulfill those objectives.

Who needs an estate plan? Chances are, you do. You may think that estate planning is just for the wealthy, but it’s not. In fact, an estate plan may actually be more important if you have a smaller estate, because your final expenses will have a much greater impact on your estate and there’s a much greater possibility that your loved ones could suffer from a lack of financial resources. The fact is, without an estate plan, you can’t control what happens to your property if you die or become incapacitated.
Generally, people create estate plans because they want that control. They also want to make sure that their wishes are clear in order to avoid family disputes. In addition, they care about preserving their property for their loved ones and want to make sure that their loved ones are properly provided for.

An estate plan is especially important if:
-Your spouse isn’t comfortable with financial matters.
-You have young children who would need a guardian
-You have an estate that will be impacted by transfer taxes. In 2014, on the federal level, that generally means estates that are over $5,340,000. We’ll go into more detail about that later. Also, be aware that this amount may be lower on the state level. States impose their own transfer taxes and each state has a different exemption amount.
Estate planning is also particularly important if:
-You own property in more than one state.
-You have privacy concerns.
-You have other distinct needs; for example, planning for the succession of a business.


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