Why You Need a Legacy Plan
If you own something, and you love somebody, you need a legacy plan. Many people think legacy planning is tax planning but there are many factors to consider. Many also think, "If I don't have an estate over $1M or $2M, I don't need an legacy plan" and that is simply not the case.
Legacy planning 101
Legal documents are critical to legacy planning. A will is the first place to start. Next, there are two types of powers of attorney. There is a financial power of attorney and a medical power of attorney. A living will is an advanced medical directive. Wills, powers of attorney and living wills should all be a part of your legacy plan.
Depending on the complexity of your estate (which could have nothing to do with wealth), other supportive legal documents may be needed. Consulting the advice of a professional advisor and attorney are highly recommended.
Trusts v. Wills
Do you need a trust or is a will sufficient? A trust does not typically provide any additional tax advantages over a will. However, a living trust does allow beneficiaries to bypass probate. The decision regarding a trust should be made based on the size of the estate, the needs of beneficiaries, and should include the advice of an estate attorney working with your financial advisor.
Legacy Tax Planning
With proper planning, a couple can often double their legacy tax exemption. It will require all the components of a well rounded financial plan including income planning, having all the necessary estate documents, investment and retirement fund planning. This can seem cumbersome to many retirees but it can be a meaningful legacy for your beneficiaries.