The Need for Estate Planning

At a person's demise there are certain typical problems that, if not planned for, create a burden on those who are left behind. These include financial burdens, the complications of arranging estate assets which were not properly set up prior to the decedent's passing, the frustrations with the transfer of assets to heirs and the issues associated with the care of minors. All of these issues can be resolved through proper pre-death planning and are outlined below. Wealth Management Services of Austin, LLC, believes strongly that these issues should be addressed. The financial burdens associated with improper planning include estate settlement costs, which include probate fees and death taxes. Probate fees are the monies generally paid to the executor of the estate and the attorney who assists with the estate. Death taxes become an issue when estates exceed certain values. These estates are typically subject to both federal and state taxes. Planning through the use of trusts, wills, and techniques associated with gifting and investments can significantly reduce these costs, ensuring that a greater portion of the estate passes to heirs.

Estate liquidity and cash flow are the most troublesome areas for the heirs of an estate that is improperly arranged. If an estate lacks liquidity, settlement costs must be paid from outside the estate or must be put on hold. This can severely lengthen the settlement process. If cash flow is not planned, it is possible that income will not be available to provide care for loved ones who are left behind such as spouses and minor children. The health and well-being of these individuals is often put into jeopardy as a result of improper planning.

One of the most compelling issues associated with estate planning is the need for care associated with minor children left behind. If planned ahead of time, parents can nominate the guardian for their children who they deem fit. They may also designate the person who will manage any assets left to minors. If this is not planned for in advance, these assets may be lost or unnecessarily reduced. Making these crucial decisions prior to passing will significantly impact the quality of life for minor children in an already difficult time of transition.

The transfer of assets is significantly impacted by wealth transfer strategies. If improper or no strategies are put into place, estate assets may be subject to probate delays and expense. In addition, assets transferred to minors may be in cumbersome guardianship accounts until they attain age 18 (or 21 in some states) and are then distributed outright to the children. In some cases, additional death taxes may be paid if there was no pre-death planning. Wealth Management Services of Austin, LLC, believes proactive planning and strategy development can prevent these problems associated with transfers of assets.

Working with an experienced, qualified attorney will increase the possibilities of dealing effectively with estate tax issues. We do not employ attorneys at Wealth Management Services of Austin, LLC, nor are we able to give legal advice. However, we do work with a select few attorneys within our network of professionals. If you already have an attorney, we can work with them as well.