Securing Your Legacy: Key Considerations for Estate Planning

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A happy older couple sits on a couch outdoors and talks about estate planning
10 Jan

Securing Your Legacy: Key Considerations for Estate Planning

Discover the importance of estate planning, unravel its key components, and learn strategies for smooth wealth transfer and tax optimization.

Key Takeaways:
Robert is a senior software engineer while his wife Lisa is an attorney, and they’ve worked hard over the years to build wealth for their family.
Robert and Lisa want to leave a meaningful legacy for their loved ones so they’ve started the process of estate planning with their wealth advisor who is showing them how to protect and distribute their assets while minimizing their estate taxes.
The couple was overwhelmed by estate planning before working with their advisor, but they’re starting to better understand its key components like wills, trusts, power of attorneys, and healthcare directives with his help.

Many people think that estate planning is only for the wealthy, but that’s simply not true. Everyone should have an estate plan, regardless of their age, wealth, or marital status. Think of it like drawing a roadmap for your future. It helps you ensure that your wishes and loved ones are taken care of after you’re gone.

Estate planning is more than just writing a will, too. It comes with tax considerations and legal complexities, making it difficult for the average person to navigate on their own. This is where a trusted wealth advisor can come in and be massively helpful, offering clear guidance on the right steps and strategies to take.

In this article, we’ll discuss the main aspects of estate planning and how an Avior advisor can support you along the way.

Key considerations for estate planning

While it may seem daunting, estate planning doesn’t have to be complex or expensive. By taking the time to consider key elements, you can develop a comprehensive plan that meets your individual needs and goals.

Whether you’re just starting out or you’re ready to update your existing estate plan, it’s important to understand what’s involved.

Will and trust

A will is a legal document that outlines your wishes for the distribution of your assets after your death. Everyone should have a will, regardless of their age, wealth, or marital status. 

A trust is a legal entity that holds assets for beneficiaries. Trusts can be used for a variety of purposes, such as managing assets for minors, providing for disabled beneficiaries, and minimizing estate taxes. Here are a few reasons to consider each:

  • To distribute assets according to your wishes
  • To minimize estate taxes
  • To protect your assets

A will is a complex legal document, so working with an experienced professional will help you to create a will that meets your individual needs and goals, and that is enforceable under the laws of your state.

Power of attorney

A power of attorney (POA) is a legal document that gives someone else the authority to make decisions on your behalf. This can be for a variety of matters, such as financial affairs, healthcare, or business decisions. There are different types of POAs, each with its own specific purpose and limitations. The different types of POAs include:

  • Durable power of attorney
  • General power of attorney
  • Limited power of attorney
  • Springing power of attorney

The most common type of power of attorney in estate planning is a durable power of attorney. This is because it is the most versatile and can be used for a variety of purposes, including:

  • Managing finances, such as paying bills, signing checks, and making investments
  • Selling or transferring property
  • Making healthcare decisions
  • Managing a business
  • Representing you in legal proceedings

If you don’t have a POA, your loved ones may have to go to court to obtain guardianship or conservatorship over you, which can be a time-consuming, emotionally draining, and costly process.

Beneficiary designation

Naming beneficiaries means that your assets are transferred according to your wishes after you die. Without named beneficiaries, your assets will be distributed according to the laws of intestacy in your state, which may not be aligned with your wishes. Here are some of the benefits of naming beneficiaries:

  • Control over asset distribution
  • Reduced probate costs and delays
  • Peace of mind

Here are a few instances of how naming beneficiaries can help you to achieve your wishes:

  • You want to leave your house to your spouse and your other assets to your children.
  • You want to leave a specific amount of money to a charity that is important to you.
  • You have minor children, and you want to leave your assets to a guardian for them until they reach the age of majority.
  • You want to avoid probate and ensure that your assets are distributed quickly and efficiently to your loved ones.

One thing to note is that beneficiary designations can override the terms of your will. So it’s good practice to review your beneficiary designations regularly to keep them aligned with your wishes.

Estate taxes

Estate taxes are a federal tax levied on the transfer of property from a deceased person to their heirs. The estate tax is calculated based on the value of the decedent’s gross estate, which includes all their assets, such as cash, investments, real estate, and personal belongings.

There are several ways to minimize estate taxes, such as:

  • Creating a trust
  • Making charitable donations
  • Using lifetime gifts

Working with an Avior advisor can help you understand the estate tax laws in your state and implement estate tax planning strategies.

If you have a large estate, it is important to talk to an Avior advisor about estate tax planning. They can help you to develop a plan that minimizes estate taxes and protects your assets for your loved ones.

Regular review and update of estate plans

Just as your life and the laws change, so too should your estate plan. Regular reviews and updates of estate plans are vital to ensure they remain aligned with your current circumstances and wishes. For example, the birth of a new child or grandchild may require you to add them as beneficiaries or set up trusts for their future. Similarly, a divorce or death in the family may necessitate changes in your will or other documents.

Avior advisors understand the dynamic nature of life and offer ongoing support and commitment to updating estate plans as part of regular reviews. The expertise and guidance we provide at Avior Wealth Management can offer peace of mind, ensuring that your estate plan is legally valid and tailored to your personal needs.

Secure your legacy with Avior Wealth Management

Estate planning is more than just writing a will. It’s a holistic process that involves considering various elements, such as trusts, power of attorney, and beneficiaries. It’s also dynamic and requires regular updates to reflect life changes and tax laws. This ensures that your legacy is secure, your assets are distributed according to your wishes, and your loved ones are well-cared for.

To navigate the complexities of estate planning, the Avior team is here to help. Our expert guidance can help you create a robust estate plan that meets your current needs and adapts to changes in your life and laws.

Remember, the first step in estate planning is starting the conversation. So, let’s talk. Contact us today and let us help you secure your legacy and ensure your loved ones are taken care of.

Disclaimer: Nothing contained herein should be construed as legal or tax advice. Avior and our Advisors will work with your attorney and/or tax professional to assist with your legal and tax strategies. Please consult your attorney or tax professional with specific legal and/or tax questions. Investment Management and Financial Planner are offered through Avior Wealth Management, LLC, an SEC-registered investment advisor. Past performance is not a guarantee of future results.  Investments are subject to loss, including the loss of principal.

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