When you execute any type of financial plan, you are generally going to act for your own benefit. However, estate planning is a different matter. When you plan your estate, you protect your loved ones, and this is why it is such an important and profound act.
The Condition of Intestacy
If you were to pass away without any estate planning documents at all, you would die intestate. Under these circumstances, your own true wishes would never be known, and people that you love could be left out in the cold or shortchanged.
The assets that were in your personal possession at the time of your passing would eventually be distributed using the intestate succession laws of the state of New York. The court would be compelled to follow these laws, and your own personal desires would not enter the equation at all.
Addressing Your Personal Needs
A well constructed estate plan will address your unique personal and familial situation. Informed planning is the key, because each family is different, and estate planning objectives are going to vary depending on the circumstances.
Estate tax exposure is one of these circumstances.. We have a federal estate tax in the United States that carries a credit or exclusion of $5.45 million during the current calendar year. You can transfer unlimited assets to your spouse tax-free via the utilization of the unlimited marital deduction, but transfers to others are potentially subject to this death tax.
In the state of New York, we have a state-level estate tax to contend with as well. You could be exposed to the state estate tax even if you are exempt from the federal estate tax, because the exclusion in New York is lower than the federal exclusion at the present time.
If your estate is going to be exposed to death taxes, estate planning is extremely important, because these death taxes can take a heavy toll on the financial future of your family.
Estate taxes are not going to be a consideration for everyone, but there are other circumstances that can call for the implementation of very specific estate planning techniques. For example, we live in a litigious society, so asset protection can be important for some people. It is also possible to protect a spendthrift heir from his or her own bad decision-making if you plan ahead appropriately.
When you devise a plan with full knowledge of all of the facts, you can position your assets strategically as you facilitate asset transfers in the optimal fashion. On the other hand, if you go forward with no plan at all as you hope for the best, negative consequences can result, and your surviving family members may pay a considerable price.
Download Our Special Report
We have prepared a special report that will provide you with numerous reasons why estate planning is essential for all responsible adults. The report is being offered free of charge, and you can visit this page to access your copy: Free Estate Planning Report.