Contrary to what many people believe, you don’t have to be wealthy to draft an estate plan, but if you are, having an estate plan is essential. Your estate plan may be as simple as writing your Wills and Powers of Attorney or it can be as complex as establishing foundations, holding companies, insurance and trusts to transfer the assets in your estate in a meaningful and tax-efficient manner. Your estate plan can be as simple or as complex as you want or need it to be. Each estate plan is unique and is designed to suite your needs, whatever they are.
Every estate plan begins with a conversation. If you’re not sure where to start, start with your Certified Financial Planner, Lawyer or Accountant. Once you’ve given consideration to what you would like to accomplish in your estate plan, you need to make sure you have the appropriate team working on your behalf. If it’s a simple estate, you may only require the expertise of a good Lawyer to draft your Wills and Powers of Attorney. If your estate involves more complex planning, such as tax planning, multi-generation wealth transfers, estate preservation or creation, business succession planning or business preservation, you will likely need to engage several experts to ensure you build an effective and viable solution. Your team will likely involve some or all of the following: Lawyer, Accountant, Certified Financial Planner, Trust Officer and perhaps others, depending on the complexity of your situation.
Often estate plans are designed to create wealth, preserve wealth or restore it. You may want to create wealth to provide for your dependents or to support a church or charity that’s played an important role in your life or the life of a loved one. Perhaps you’ve already created your wealth, personally, professionally or inside your business and want to protect it from creditors, taxes or dispute. You may be in a situation where you’ve been successful at creating your wealth, but had it diminished due to hardship, health costs, taxes, business or market losses. Some estate planning strategies are designed to restore your wealth to ensure your legacy remains intact to the next generation.
Once your estate plan has been designed, it needs to be appropriately documented to ensure its success. The plan should also be shared with those that will be affected by it. Sharing your plans can help uncover any potential conflicts so they can be dealt with in advance, which increases the likelihood of success.
Not having an estate plan in place could create havoc for your family or business and could potentially put them at risk. Don’t leave your family or business guessing at what your intentions were. Make your intentions known in a well thought out written plan, supported by professional advice. There are no second chances when it comes to estate planning. You only get one chance to get it right, so make sure you take the time and employ the expertise required to ensure your plans are effective.
Article written by: Brad Giroux, CFP, CHS, PFP
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