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Thursday, June 1, 2017

The Many Ways That Your Estate Plan Can Achieve ‘Extra’ Planning Goals

Summary: An estate plan can accomplish many major, common goals like avoiding probate, saving on some taxes and providing for a surviving spouse. But, if your objectives go beyond that, chances are your plan can help meet those preferences, too. With a carefully crafted plan, you can not only provide for your loved ones’ needs, you can incentivize them to make positive choices, too. 

Pay attention to discussions surrounding estate planning long enough and you’ll hear certain reasons for planning come up again and again… avoiding probate, potentially saving on certain taxes, directing family business succession or providing for your surviving spouse and children. These are all very important and very valid reasons to go out and get an estate plan (or update the one you have) and to do so without delay. However, these are not the only objectives you might want your plan to accomplish, and these are certainly not the only objectives your plan can achieve.

One thing that many people want to include as part of their legacy is helping to encourage their loved ones to make positive choices. What that means may vary depending on you and your family. Maybe you want your daughter to go to college and obtain a degree. Or perhaps you want to encourage your son to settle down, get married and live a more stable lifestyle.

There are ways of using your estate plan to accomplish these ends. One or more trusts may potentially serve as very useful vehicles in meeting this goal. Your trust(s) can dictate that certain events in a beneficiary’s life will trigger certain distributions to them from the trust’s assets. Those events could include things like graduating from college or getting married. By inserting these types of provisions, you are reaping multiple benefits. You are reinforcing your values (such as the importance of education and/or family,) you are helping incentivize your loved one to make wise decisions and, by delaying some of your loved one’s receipt of money, you are protecting him or her from the problems that can arise from receiving too much wealth at too young an age in a single lump-sum.

Speaking of protection, your trust can also help shield your loved ones, too. If you have a loved one with addiction issues, you can keep his or her money in trust, which offers the added protection of your trustee handling this beneficiary’s wealth instead of the addicted beneficiary him/herself. These same types of protections can be used for other beneficiaries, too, like a loved one who is in a bad marriage or is being sued. Certain trust types, such as ones often called “spendthrift trusts” can help you meet these goals.

Finally, it is often useful to make sure that your incentive provisions in your plan are what some observers call “more carrot and less stick.” By offering positive incentives, you will encourage your loved ones to follow the wise path you’d like them to follow. Negative incentives, such as provisions that call for your loved one to lose some or all of his distribution may not only create ill feelings, they may also invite legal contests to your plan, too.  

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


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