Top 5 Reasons to Plan Your Estate
It’s a fact that most Americans lack a solid estate plan. Considering that mortality is one of life’s few certainties, this oversight is both perplexing and concerning.
If you’ve not yet planned your estate, especially when others depend on you, you’re exposing yourself and your loved ones to a host of challenges and uncertainties. In this post, we’ll discuss the top five reasons you should establish an estate plan without delay.
1.) Eliminate the Risks of Intestacy
Dying without an estate plan means your assets undergo a process known as intestacy. This involves the probate court appointing a personal representative who identifies your assets, pays off your debts, and then distributes the remaining assets according to the intestate laws of your state—in our case, Oklahoma.
Not only can this be a lengthy and unpredictable process, but your assets may not go where you would have wished. An estate plan ensures that your wishes dictate asset distribution, offering peace of mind for you and your family.
2.) Reduce Estate Tax Burdens
Both federal and state-level estate taxes can take a significant bite out of your assets. At the federal level, the estate tax rate maxes out at 40% on amounts exceeding $12.92 million.
Fortunately, we do not have a state estate tax in Oklahoma. However, if you own valuable property in one of the 12 states that have estate taxes, it would apply to your estate if the value of the property is higher than the exclusion in that state.
The families of people like Jim Morrison of The Doors and Tony Hsieh, former Zappos CEO, paid the price for inadequate estate planning. Don’t make the same mistake; consult a lawyer to strategically minimize your estate tax liability.
3.) Safeguard Your Minor Children’s Future
Statistics are grim: only 27% of individuals aged 35 to 54, and 24% of those aged 18 to 34 had estate plans in 2023 according to Caring.com. These age groups commonly consist of parents with dependent children.
Should your income vanish unexpectedly, what happens to your family? A comprehensive estate plan is indispensable for parents. Instruments like a living trust or testamentary trust can ensure that a competent adult manages the financial aspects for your minors. Life insurance can be another layer of security, serving as a financial safety net.
4.) Protect Spendthrift Beneficiaries
If you’re worried about leaving assets to someone not skilled at managing money, a living trust with a spendthrift clause can be your answer. You retain control of the assets while alive, with a designated successor trustee taking over after your death. Such a trust shields the principal from creditors and allows you to set the terms of asset distribution, ensuring that the beneficiary doesn’t squander their inheritance.
5.) Plan for Medicaid Eligibility
A staggering number of seniors will require long-term care, which Medicare doesn’t cover. Medicaid does, but qualifying for it requires careful planning because there is a low asset limit.
However, a carefully designed trust can provide income during your later years without jeopardizing Medicaid eligibility. But be aware that Medicaid has a five-year look-back period, making early planning crucial.
Attend a Complimentary Education Event!
Since you are here, you must be looking for information about estate planning. This is definitely the right place to be on that level because we have a treasure trove of written materials to explore right here.
Plus, we go the extra mile to provide opportunities with our educational seminars. The sessions are very well received, and you will learn a lot if you join us. There is no charge, You can see the dates and obtain registration information if you visit our seminar schedule page.
It’s Time to Take Action!
If you’re ready to ensure the ongoing well-being of your loved ones, we are here to help. You can call us at 918-615-2700 to schedule a consultation at our Tulsa, OK estate planning office. The Oklahoma City location can be reached at 405-843-6100. We also have a contact form on this site you can use if you would prefer to send us a message.
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
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