There are three places your "stuff" can go after you die: to the government, attorneys and other professional advisors by way of taxes and administration expenses; to your loved ones; or to charity. A good estate plan will minimize the amount that is bled away in the first category. A really good estate plan will help to ensure that your intentions regarding your loved ones and your favorite charities are carried out as well.
Giving assets outright to your loved ones is a way to give them full control over and responsibility for those assets. However, one of your intended beneficiaries could easily lose his or her inheritance as a result of a divorce, car accident or bad business deal. And this could happen due to no personal fault of your beneficiary. For this reason, many estate plans include ongoing trusts that allow the beneficiaries to have as much control as they are able to handle, while at the same time insulating the trust assets from creditors and predators who might try to take those assets away.
The thing about leaving assets to your loved ones after you are gone is that you will have no idea how each of them will handle his or her inheritance. Your best guess during your lifetime could turn out to be wrong. So what about making gifts during your lifetime that will enable you to see how your intended beneficiaries handle their new-found wealth? This could be a great way to "test drive" your estate plan and determine how well it works while you are still able to make adjustments to it. If one beneficiary turns out to be a poor steward of your wealth, you can always redirect assets in your final estate plan to other beneficiaries, or provide greater restrictions on a spendthrift beneficiary's control over your wealth.
Est8Planning Counsel LLLC
Scott A. Makuakane and Roya J. Deyhim
Estate Planning Attorneys
Similar principles apply to charitable gifts. Your favorite charity could turn out to be a poor manager of donated assets. It would be far better to find that out during your lifetime rather than leave your loved ones regretting your philanthropic choices. If a charity does what you hope it will do with your gift, you can add to it upon your death. Not only that, but your gift may have far greater impact the earlier you make it.
For all of these reasons, you should consider "giving while you're living so you're knowing where it's going."
Scott A. Makuakane and Roya J. Deyhim are estate planning attorneys with the law firm of Est8Planning Counsel LLLC. Contact Est8Planning Counsel LLLC at 891-8881 or www.est8planning.com.