Legacy planning certainly involves very specific pragmatic objectives. First of all you are going to want to inventory your assets and evaluate who exactly will be benefiting from your estate. With the assistance of an estate planning attorney you then decide how you will be transferring the assets. This is very important because there are sources of asset erosion that exist, and if you don’t do things properly your loved ones can pay a hefty price.
One of these sources of asset erosion is the estate tax. At the present time the rate of the tax is 35% and the exclusion is $5 million, so the federal government will consume over a third of the taxable portion of your estate as the laws stand on this day. However, these parameters are not permanent. At the end of next year the maximum estate tax rate is going up to 55% and the exclusion is going to be reduced to just $1 million. As you can see, this federal levy could have a life-changing impact on the family that you will be leaving behind.
Once you have your ducks in a row from a financial perspective you may want to consider adding something called an ethical will to your estate plan. These documents do not involve the transfer of property and they are not legally binding. An ethical will is used to pass along information to your loved ones that you feel would be useful to them.
These documents have been utilized for centuries as a way to pass along wisdom to succeeding generations, and traditionally people who compose one share their ethical and spiritual values. However, there are no hard and fast rules rules; you’re perfectly free to express anything that you would like to when you compose an ethical will.
Financial resources are great, but they can’t buy knowledge and wisdom. We all must part from our families at some point, but if you leave behind an ethical will they will always have your experiences and insights to draw from.