What is the ultimate goal in the creation of an estate plan? Is it making sure that your wealth and assets get passed on to your intended heirs? Is it to minimize estate taxes? Is it to ensure that your name lives on in the form of charitable giving?
Most people would instinctively answer “yes” to one or all of these suggestions. In these ways, estate planning is often thought of as a way for one’s heirs to take advantage of wealth that they can no longer use. But rather than just divvying up your money and assets, estate planning could be viewed as a way to ensure the strength and stability of your family for generations to come.
Consider the fact that even when estate planning is done carefully, there are often negative collateral consequences. These can include:
- Heirs (usually sons and daughters) who end up fighting over their share of the estate
- Heirs who are “banking on” their inheritance and therefore do not learn much personal initiative
- Heirs who feel entitled to their inheritance and become angry if/when they receive less than they were expecting
- Heirs who ultimately suffer financial problems because they inherited a large sum of money and did not know how to manage it wisely
No matter how much or how little you expect to leave behind, proper estate planning may allow you to empower your family members and improve the lives of your children, grandchildren and great grandchildren. At the same, you can protect against the unintended consequences of a large, lump-sum inheritance or a “money grab” that causes strife between family members.
If you want to know more or are ready to get started, please contact an experienced estate planning attorney.
Source: New Hampshire Business Review, "A new paradigm for estate planning," Charles H. Baldwin, May 29, 2014