While the news is filled with tales of ultra-wealthy people and the steps they take to protect that wealth, it can be easy to think that wealth-protecting steps and instruments are only useful to those living in a different financial stratosphere than the average middle class, upper middle-class, or working class individual or family.
In particular, we routinely hear about the estate tax (or at least we hear about it every four years in presidential cycles), which does only apply to individuals and families who have assets that are well above that of the vast majority of families, even those earning six-figure incomes and beyond. In fact, the current combined lifetime gift and estate tax exemption for individuals is $5.6 million, and $11.2 million for married couples. This means that a married couple can give away or bequeath up to $11.2 million over the course of their lifetimes without paying a single cent in federal estate taxes (note that state estate taxes may be another matter).
But a common misconception conflates the broad concept of estate planning and the very specific issue of the gift and estate tax. While those with significant assets that do trigger the gift and estate taxes are certainly advised to work with estate planning professionals to limit their tax liability, estate planning is about far more than taxes.
Estate Planning Helps All Adults (and Their Loved Ones) in a Variety of Ways
No matter what level of wealth you attain in this lifetime, estate planning can provide you and your loved ones with a significant number of important benefits. By creating or updating a will, trust, or other estate planning instrument, you can achieve the following, among other things:
- Avoid costly probate trials for your beneficiaries which end up diminishing your estate assets, and causing delay and legal costs for the people you wish to benefit
- Protect your assets from creditors both during your lifetime and after so that your beneficiaries can receive your property without creditors filing litigation to reclaim it
- Direct how your assets should be used in your lifetime and after your death, so that you benefit your loved ones in specific ways and prevent waste, mismanagement, and misdirection of funds and property
- Provide end-of-life planning for you as well as appointing others to manage your funds and make important decisions on your behalf
- Give your loved ones the peace of mind that you have taken steps to prepare for their future
Contact an experienced estate planning professional to determine what steps you can take to protect and benefit yourself and loved ones.
Update Your Estate Planning With a Pasadena Estate Planning Attorney
Estate planning and probate attorney Christopher B. Johnson, located in Pasadena, California, has years of experience in all aspects of estate planning, and works with clients from all walks of life to create estate planning tools that reflect their needs and those of their beneficiaries. To request an immediate consultation, contact him today at (877) 755-9178.