Does Your Estate Plan Call for More Than Just a Will? – Kiplinger’s Personal Finance

Estate planning is not a one-size-fits-all proposition. The strategies used by young couples just starting their careers and families will not work for seniors with significant assets and multiple generations to consider. How individuals approach these decisions must be governed by their unique circumstances, as well as their ultimate goals.

Regardless of income, assets, or family circumstances, everyone wants to minimize taxes and ensure a smooth transfer of assets when the time comes to distribute their estates. These are the top strategies I recommend people consider when making estate plans.

 1. Revocable trusts

Everybody needs a will. Wills let others know how you want your property to be distributed after your death. They ensure that your minor children will be cared for by the friends or family members whom you trust.

But executing a will takes time, and your beneficiaries may have to wait for the court probate process to conclude before enjoying your gifts — also turning the state and attorneys into a larger beneficiary of your estate. Thus, the chief benefit of a revocable trust: It bypasses probate, allowing your property to transfer immediately, in accordance with your wishes. Because it creates no public record of your estate plans, your wishes will remain confidential. 

So, who should have a revocable trust? To my mind, everyone should at least consider it. It may seem overkill for those of limited means or few assets, but there is little downside to creating a trust, and there could be considerable upside.

Imagine, for example, that a person has become incapacitated due to illness or old age and is no longer capable of managing their affairs. A power of attorney is certainly an option for ensuring that the person’s interests are protected, but these powers do not easily cross state lines. They are disfavored and looked upon with skepticism by banks and other financial institutions that have become increasingly wary about the prevalence of fraud.

Trusts are recognized in every state. They can spell out in clear and incontrovertible terms the wishes of an incapacitated person. Who will handle their finances? Who will oversee their tangible and intangible assets? Who will make important decisions on their behalf?

Revocable trusts are seriously undervalued, but they address almost every contingency that a standard bank form misses. A will may be useful when you’re dead, but a trust can help you while you’re still alive as well.

2. Family limited partnerships

For those who  – presently valued at more than $12.06 million – they owe it to their beneficiaries to take measures to lessen or eliminate the burden of estate taxes. A family limited partnership is one of the …….


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