Estate Planning: How to Ensure Your Wealth is Passed on Effectively

It’s a common misconception that estate planning is reserved for the elite—high-net earners who want to protect their finances and ensure their assets are protected. The truth? Estate planning is for everyone, regardless of income level or asset size. By being proactive about your estate plan, you’re protecting your assets, ensuring your final wishes are honored, and providing clear guidance and support for your family, no matter what the future holds.

Why Set Up an Estate Plan?

Setting up an estate plan now is a wise decision for several reasons:

Peace of Mind: An estate plan guarantees your assets go where you want them, ensuring your final wishes are honored and your family is cared for.

Avoiding Probate: Without an estate plan, your estate may go through a lengthy public probate process, which can be costly and time-consuming. An estate plan, especially one that includes trusts, can help bypass probate, ensuring a smooth and private transfer of assets.

Preparing for Unexpected Circumstances: Estate planning protects your assets and informs your family about your health care decisions in the event you are incapacitated. By setting up powers of attorney and health care instructions, you ensure that your wishes are respected and that someone you trust makes decisions on your behalf.

Tax Benefits: A well-structured estate plan can also reduce your tax burdens, ensuring more of your assets are passed to your family—not the IRS. This is especially important for those with high estate or inheritance tax rates.

Setting Up an Estate Plan

Setting up an estate plan is a multi-step process. Here’s a quick guide to get you started:

Set Up a Will: Your will is a crucial part of your estate plan, detailing the distribution of your assets when you pass away. An estate planning expert will ensure your will abides by state laws and accurately represents your wishes.

Understand Trusts: A trust is a legal arrangement where a designated person, the trustee, manages assets for someone else, known as the beneficiary. The primary benefit of a trust is its ability to transfer assets to beneficiaries directly, bypassing the probate process. Additionally, it offers the flexibility to determine the specific timing and manner of asset distribution.

Understand the Tax Cuts and Jobs Act: As of 2023, the Tax Cuts and Jobs Act set a lifetime estate tax exemption of $12.92 million for an individual and $25.84 for married couples. These exemption levels may increase in 2024 and 2025. However, after 2025, the law is set to change back to previous lower levels (adjusted for inflation). This means the amount you leave to your beneficiaries could drop to somewhere between $6.5 million and $7 million per person. In short, consult with an experienced financial advisor; you may want to consider giving some lifetime gifts between 2023 and 2025.

Consider Charitable Giving: Charitable giving is another innovative way to fulfill philanthropic goals while reducing tax obligations. Options include direct bequests in your will, establishing a charitable trust, or using tools like donor-advised funds.

Navigating Your Financial Future with Shared Vision Wealth Group

Are you looking for effective wealth management solutions? Shared Vision Wealth Group, LLC is here to help. Whether you need assistance with estate planning, tax planning, financial, or portfolio management, our team of advisors is ready to help you confidently navigate your financial future. Contact us today!

“Shared Vision Wealth Group, LLC is an SEC-registered investment adviser. Shared Vision Wealth Group, LLC does not provide tax or legal advice. This material is for general information only. Consult a tax professional and attorney regarding your specific situation."