Financial planning maps out your future and creates an environment in which your family can be secure and thrive. Planning for a time when you will no longer be around is an important part of ensuring that future well-being. Estate planning allows you to arrange for the distribution of your financial assets to your heirs or intended beneficiaries after your death or incapacitation. Planning ahead lets you assert greater control over the legacy you leave to your loved ones. Conversely, not planning ahead can lead to unnecessary expenses, family conflict, and ill-will.
Rollins Financial will put you in touch with experienced estate attorneys who can take the legal steps to ensure a seamless transfer of assets. We offer financial advice to make the process as smooth as possible, including finding ways to lower expenses and minimize your tax debt, to pass as much of your estate as possible on to your loved ones.
Even someone of modest means can have a fairly extensive estate. Assets include houses, cars, real estate, stocks and bonds in brokerage accounts, retirement funds, life insurance, and valuable personal belongings. Liabilities and debt obligations are also part of an estate and must be accounted for.
Too many people make the mistake of thinking they’re not wealthy enough to need estate planning, or even to take the most basic first step of drafting a will. Estate planning can help to preserve family wealth, providing for surviving spouses and children, and for their education.
A will names an executor - a person to carry out the directions spelled out in the will - and gives instructions on what should happen to a person’s property. If the decedent – the person who died - has minor children, it can also give guidance with regard to their care. The executor of a will has 30 days to have the authenticity of a will affirmed by a probate court. The court will officially give the executor the legal authority to act on the decedent’s behalf.
Probate is the legal process necessary to transfer assets to inheritors after someone has died. An executor named in a will – or appointed by a judge if no executor has been named – carries out the legal tasks. They must prove that a will is valid, identify and inventory the assets of the person who has died, have property appraised, pay all debts and taxes, liquidating assets if necessary, and finally distribute the remaining assets as directed by the will or state law.
You want your inheritors, not estate lawyers, to get as much benefit as possible from the assets you bequeath to them upon your death. Probate can be very expensive, involving significant paperwork and court appearances. All these expenses come out of the estate and reduce the benefit to inheritors.
Probate also takes time and is generally a public process. For a variety of reasons, it may be desirable for the distribution of an estate to be done privately and as quickly as possible. Probate can tie up property that could be helping your inheritors for months or years at a time. Even when a will is uncontested, the process can be lengthy and expensive. Trusts can be a good strategy to reduce the amount of property which will be subject to the probate process, or eliminate it altogether.
Estate taxes can significantly reduce the value of an estate before its assets are distributed to the beneficiaries of a will, potentially creating sizable liabilities for the family involved. The estate planning process can employ strategies to transfer wealth across generations which mitigate tax liability.
Rollins Financial can help you determine if trusts are right for you. A variety of trust types are available to estate planners. Revocable trusts, or living trusts, can be very helpful in avoiding the probate process. They allow the trustee, usually the person who established the trust, to remove property from the trust while they are alive. Upon the death of the person who established the trust, it becomes irrevocable. Living trusts do not fully protect property from creditors – if you can retrieve assets from a trust they remain part of your estate - but they can greatly simplify the process of transferring them to your heirs.
Irrevocable trusts are commonly used due to estate tax considerations. Once assets are placed in an irrevocable trust they no longer belong to you. They belong to the trust and are not subject to estate taxes upon your death. If assets are determined to be “gifts in contemplation of death” because they were placed in a trust too recently, they may still be subject to death taxes.
Another strategy estate planners can use to mitigate estate tax liability is charitable giving. Gifts reduce the size of an estate and the estate tax bill. This means the individual has a lower effective cost of giving. Rollins Financial can help formulate a strategy to maximize the effect of your giving and the legacy that engenders.
Life insurance is an important aspect of a solid estate plan; if the policy is properly structured any income tax due on distributed assets should be easily paid without resorting to the sale of assets. Money from life insurance policies themselves that beneficiaries receive are typically tax-exempt.
We understand that estate planning is a crucial part of our clients’ overall financial well-being. Estate planning is a lifelong process. Your financial situation, family makeup, and goals change. So should your estate plan. The financial planning experts at Rollins Financial can help you along the way.