We all live busy lives and want to enjoy the often little free time that we get. Discussing your potential future incapacity, your death, and taxes is not – for many people – the most enjoyable way to spend that time. However, taking a little time to plan now can help protect you and your loved ones from significant difficulty and expense in the future.
Estate planning – preparing documents such as revocable living trusts, wills, powers of attorney, and health care directives, among others – is not often discussed over the course of our lives and remains a fairly opaque concept to most people. Whether you are an amateur or an expert, it is helpful to know: Where should you start?
Incapacity Planning
An important, and often underemphasized, element of estate planning is incapacity planning. Incapacity planning involves deciding now, while you can, who you want to be in charge of your financial and health care decisions in the future if you lose the ability to control those decisions yourself.
Post-Death Planning
Post-death planning typically consists of a revocable living trust and/or a last will and testament. These documents allow you to determine how your assets are distributed at your death and how those assets are protected, if at all, for your beneficiaries. For parents of minor children, this is often also where guardians are nominated. A revocable living trust allows the surviving family to avoid the probate court when distributing someone’s assets whereas a Last Will and Testament needs to be probated.
Tax Planning
There are a number of strategies that can be used in a revocable living trust, with irrevocable trusts, and with business entities to try to maximize the amount of assets passed on to your beneficiaries during your life and at your death while minimizing the impact of taxes and fees. For many of those strategies, there is a significant benefit to starting early to allow these assets to grow as much as possible during the remainder of your life.
Getting Started
A good first step is always to reach out to your Lido advisor, who can put you in touch with a member of Lido’s estate planning department to walk you through what may be the best fit for your specific situation. If you already have an estate plan in place, you should review it every 3-5 years to ensure that it still fits your needs. Estate planning should always be done with the assistance of a licensed attorney, so please reach out to your advisor if you would like a referral to an attorney in your area.
