Estate planning often seems to be all about numbers. Maybe you start by figuring out what you have, what it’s currently worth, and what its value is projected to be in the future. Then you decide how you want to slice up the pie for your heirs while forfeiting as little as possible in estate taxes. The emphasis is normally on maximizing the tax benefits available under federal and state laws. But the real goal of this process is to establish your legacy and help your family. When you look beyond the numbers, estate planning is all about people.
Part of our job as financial advisors is to help people discover what they hope to accomplish with the wealth they’ve built. That may involve looking back on your own life and thinking about what you’ve learned. What were your biggest successes and failures? What are your aspirations for your children, and what are their own goals that you could help them achieve?
Taking the time to reflect upon your personal history may pay off in ways you didn’t expect. You may remember a formative episode or period in your life that taught you something that could be valuable to your children, and there might be an opportunity for your estate plan to incorporate those insights. In one case, a parent wanted to leave assets in a trust to pay for the higher education of his children. But as he talked about his objectives with his advisor, he realized that most of his real education had come from life, rather than from what he absorbed in college classrooms. So the advisor worked with the man’s attorney to revise the terms of the trust so that it could finance similar experiences for his children.
In another instance, an entrepreneur confided how she had struggled for years before finally achieving success with a business venture. As a parent, she wanted to instill the same entrepreneurial spirit in her own children. Her advisors helped her devise an estate plan that would enable her children to take sensible business risks without jeopardizing their inheritances.
In brainstorming to uncover your own estate planning priorities, you might want to explore questions such as these.
Answering these and similar questions may suggest ways in which your estate plan could support your heirs in their quests for fulfilling, meaningful lives. And while it’s important to structure your estate to minimize taxes, other goals are just as crucial. We can work with you and your attorney to create or revise a plan that addresses your priorities.
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