If you possess a wealthy estate, or have a family that has a very high income you’re going to have different needs when it comes to estate planning. One of the biggest concerns you’ll have to face is taxes and what to do with your wealth after you pass.
In this post we’re going to examine the steps you’ll have to take when planning a wealthy and higher income estate and what benefits you’ll be rewarded with by having this kind of foresight.
What Are The Benefits Of Making Sure My Estate Is In Order?
By getting your estate in order and establishing a trust you can be sure you know exactly where your wealth is going when you pass away. If you’ve spent your entire life building a business and taking care of your financial reality why would you want it to go to waste?
Taking the time to plan your estate will ensure you avoid taxes as much as possible and take care of your family for years to come. By planning strategically you can be in control of your wealth and provide value for a very long time.
Aspects Of Your Estate To Consider
When planning your estate you’ll have a lot of things to consider, beyond where your wealth will go you’ll have to set forth power of attorney and other elements of financial dispersal and control.
Below you’ll find some of the most common factors you should include in your estate.
- The Transfer Of Wealth To Spouses
Depending on your marriage situation you’ll have a few different decisions you can make. In the past in order for your spouse to get full tax benefits they needed to be the full beneficiary of your estate.
However, times have changed and due to marriage and divorce you may have a different marital situation. In order to gain more control over where your wealth is going you may want to establish a trust that sets specific rules and boundaries about how your income is going to be dispersed.
- Concerns With Other Offspring And Family Members
Families are an ever-evolving unit. This means you’ll need to be specific about the kind of language you’re using in your trust. For instance, if you have a large family with adopted children, or children from different spouses you’ll need to be very clear with your terms of dispersal.
You’ll want to make sure every area of your trust is as clear as possible and nothing is left to interpretation.
- Incentive Trusts
Incentive trusts are very popular and essentially offer conditions that need to be satisfied if the funds are to be dispersed. For example, you may want to encourage your children to attend a certain college or satisfy certain life requirements before the money handed over to them.
By offering incentives you’ll be able to choose when is the best time to distribute your trust. You can even specify certain age requirements that need to be met for the money or other assets to be distributed.
- Who Is Making The Decisions?
Another common option is when you’re not sure how you want the money to be dispersed, but you’re sure you’d like the money to stay in your family. This is where you’ll give certain family members power of appointment where they’ll be able to decide what’s best to do with the future of the estate.
Distributing your wealth to your family and deciding what happens to your estate after you pass is no easy decision. However, having the foresight to plan everything early will make sure your wealth goes exactly where you intend it to go.