Some people view estate planning as a one-time exercise in executing a last will, but in reality making preparations for the future should be seen in a more expansive light. This is one of many common misconceptions that is in circulation, and we would like to shed some light on the subject of legacy planning in an effort to separate the myths from the facts.
With regard to the notion that estate planning is a “one and done” exercise in creating a last will, it should first be noted that a last will is not going to be the best vehicle of asset transfer for many people. Most people have heard of trusts, but many of them are under the illusion that trusts are only relevant to people of extraordinary wealth. This is really not the case at all.
When you utilize a last will to transfer your assets your estate must pass through probate, and this can be expensive, time-consuming, and potentially problematic with regard to possible challenges to your will. If you were to use a revocable living trust to transfer your assets you may wind up saving money in the long run, you will eliminate the possibility of will challenges, and your heirs will receive their due quickly and efficiently.
Another myth regarding estate planning involves the idea that only the super-rich have to worry about the estate tax. As the laws stand at the present time, the estate tax exclusion is going to be reduced to $1 million and the rate of the tax is going to rise to 55% at the end of 2012. You do not have to be a Wall Street CEO to accumulate assets in excess of $1 million over the course of your life if you include the value of your home, your retirement savings, your spouse’s accumulated resources, and any inheritances you may have received.
The best way to get good information when you are planning your estate is to go to the source. When it comes to legacy planning, the only logical course of action is to develop a relationship with a licensed and experienced estate planning attorney.