Wealth decisions – a matter of life and death

Wealth management includes having an estate plan prepared to manage your assets while you are living and to pass them to your loved ones after death.

A simple will is satisfactory in some cases, while a revocable trust may be more appropriate if you have more significant assets or a taxable estate. An estate plan can reduce or eliminate estate taxes and avoid the delays that come with probating an estate.

Proper planning

The amount of assets you can pass on after death without imposition of estate taxes (sometimes referred to as the “unified credit”) is currently $2 million. If you are married, with proper planning, you and your spouse may pass a total of $4 million without estate taxes being incurred. The unified credit is scheduled to increase, but the increase has not been made permanent by Congress, and may decrease in the future if no action is taken.

While it may not be possible to predict what the future of estate taxes will bring, it is certain that with an estate plan, assets will pass with as few taxes as possible and in the most efficient manner.

For many people, a revocable trust is an excellent vehicle for managing assets and passing them to beneficiaries.

Establishing a trust

When you establish a trust, the trustee is responsible for managing the assets in accordance with its provisions. You are usually your own trustee, for so long as you are living and capacitated.

Upon death or inability to serve as trustee, a spouse, child or corporate trustee is named to act in your place as successor trustee.

When a trust is in place, you transfer your assets into the trust for the trustee to manage.

If an individual is named as successor trustee, that person should be trustworthy, reliable and competent to manage your financial affairs.

Powers of attorney

Along with a trust or will, it is advisable to prepare a power of attorney for financial matters. With such an instrument, someone could act for you in the event you were unable to act.

For example, if your home were titled with your spouse, and one of you became incapacitated, a power of attorney would allow the sale of the property without court order.

You are also best protected if you have a power of attorney for health care, which allows another person to make health care decisions if you are unable to do so. Life-prolonging procedures may then be terminated if they do not result in a meaningful quality of life.

Planning your estate is an important aspect of wealth management.

Proper planning will minimize estate taxes, provide for asset management during incapacity and allow for the orderly transfer of assets to your beneficiaries after death.

Stephen F. Aton is a Springfield attorney practicing corporate law and estate planning and real estate. He owns Aton Title Co. LLC and can be reached at steve@atonlaw.com.[[In-content Ad]]