According to a 2010 study from Forbes, only 35% of Americans have a will,1 and many spent less time on it than they did planning their last vacation. In neglecting estate planning, they risk losing a sizable portion of their estate to taxes and fees.
Before transferring your estate, develop a wealth management plan that matches your priorities.
To preserve your financial independence, you must reconcile the gap between perceived wealth and actual wealth. Define what’s required to maintain your current lifestyle – the income needed for consumption and material assets – while preserving liquidity.
Wealth transfer to heirs
Though you want your heirs to exhibit character, integrity, family legacy and responsibility, it’s practical to prepare a safety net. Questions to consider include:
- What are my financial/non-financial goals for my heirs?
- Does my plan accomplish those goals?
- What structure best provides my heirs with appropriate assets?
- Have I prepared for unforeseen circumstances?
- What structure promotes our family values?
- Are my heirs prepared to act responsibly with what I leave them?
- Will my planning unite my family members or pull them apart?
- Have I made provisions for my community legacy?
Establishing objectives for your wealth management plan is the most important step. It should consider your interests, needs and concerns; acknowledge the involvement you want in philanthropy; incorporate your heirs’ interests; and consider your estate plan in a timely, effective and tax-efficient way.
Your advisor will work with you to determine your best course of action. Always consult your tax professional regarding your financial situation.
1. Ebeling, “Americans Lack Basic Estate Plans,” Forbes.com, March 2010.
Robert W. Baird & Co. does not provide tax or legal advice. You are encouraged to seek the advice of your tax or legal professional.