Every adult in Wisconsin and throughout the country should have an estate plan. That may just mean a will. This most basic document allows you to name an executor and a guardian for any minor children along with listing recipients of your assets after you pass away. But so many people need more than that. For high net worth individuals, it’s important to understand that proper estate planning means doing more than the basics.
Why make a plan?
When you pass away, your estate may be subject to federal estate taxes. Creditors or blatant fortune hunters may also try to pursue your estate. This means that your family could have to deal with further hardships in addition to the loss of their loved one. Luckily, there are some ways to avoid this.
Strategies for preserving wealth
The first step in estate planning is the will. If you die intestate, your estate may have to go through a long process in probate court. The next step is to set up a trust. There are many different kinds of trusts. Some make it possible to pass money directly to close family members, like your spouse and children, upon your death. This can help them with expenses at a trying time.
Another step is to check your beneficiaries. Often, people choose a beneficiary for an insurance policy or retirement account and forget it. This can have unintended consequences. Make sure to check your beneficiaries during open enrollment at work and after major life events. For example, after a divorce or a remarriage, you may want to change your beneficiaries to reflect your new circumstances.
Estate planning can be complicated. It’s difficult to think about becoming disabled or dying. But making a thoughtful, airtight plan can be a huge gift to your loved ones during a difficult time.