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Estate Planning
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With your large amount of assets, you need to discuss your estate plans in detail with your estate attorney and your tax adviser. Your estate consists of all the property and investments you own at the time of your death. This includes everything: Real estate, both buildings and land; stocks, bonds, mutual funds; other investments; all types of collections; art, furniture, clothing, cars and other vehicles, boats, planes and all your businesses.
The federal government and most of the states put a tax on your assets before they are transferred to your heirs. This can become very complicated, so it is important that you talk with your tax accountant and estate attorney, and then tell your heirs just what your plans are; that is, who gets what. Discuss it with them regularly so everyone understands and agrees with your plans.
If you do not have a written estate plan, your assets will be divided and distributed according to the laws of the state you live in. This could be totally contrary to what you want to have happen. Your written estate plan can be either a Will or a Living Trust. A will requires that your heirs hire an attorney (this is mandatory) and go to court where the judge will see that your plans are followed exactly. This takes time, often one to two years, and the attorney is paid 2% to 10% out of the estate.
With a living trust, you appoint a Successor Trustee to manage your estate and distribute it after your death, or if you become incompetent. This successor trustee is legally responsible for managing and distributing your estate exactly as spelled out in your living trust. This is normally fast and simple and no probate court is involved.
You can also set up separate trusts for special people, gifts and charities that you want to provide for. And you can set up a foundation to manage your wealth and distribute it according to your plans.
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As your family and your family's future together are discussed, it is important for everyone to come to realize three things;
1. This wealth is the result of hard work, sustained effort, responsibility, and certainly some planning.
2. With wealth comes responsibility to maintain and steward the wealth. It is to be used well and not wasted.
3 Money is only a tool; it is not the goal. Money and its income can be used and it can grow. Well managed and stewarded, your money can be a huge benefit to your family and its future generations, and to many, many others. Use this tool well.
Also, some additional good ideas may come out of these meetings.
Estate planning is very valuable and cannot be done too soon. The lack of estate planning invites waste, greed and the rapid dissipation and disappearance of your estate.
Peterson Money Books
Book: The Challenge of WEALTH, by Erlend Peterson, CFP
Managing the Joys, Responsibilities, and Opportunities
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