Estate Planning: Non-Tax Reasons

ESTATE PLANNINGNon-Tax Reasons to Plan

Avoiding, or decreasing, an estate’s tax burden

is often a motivation behind estate planning

While tax avoidance is certainly an important goal of a

comprehensive estate plan there are other important reasons to

create an estate plan

INCAPACITY

Incapacity may be the most important reason to create an estate plan

1

Without an incapacity plan healthcare decisions may default

to someone unintended

An advance directive, healthcare POA, or similar document lets you decide who will make healthcare

decisions if you become incapacitated

END OF LIFE DECISIONS

can also be made in a separate document

A property POA allows an agent to

control property in the event of your incapacity

DIVISION OF ASSETS2

Most common reason people give for estate planning

Particularly important if you do not want your intestate heirs to

inherit

Allows you to gift to an unmarried partner, friend, or

charity

CONFLICT AVOIDANCE3

An estate plan allows you to make your wishes clear

This is particularly important if you are making

non-traditional choices

Sharing your plan lets beneficiaries

and heirs know ahead of time what to expect which often decreases the possibility of

conflict

GUARDIANS4

If you and your child’s other parent are both unable to care for

your child a court will have to appoint a

guardian

Applies to parents and other dependent loved

ones as well

The court will make the decision “without guidance or input from

you.”

A complete stranger could be appointed

By nominating a guardian in your plan you can influence the court’s appointment when the time comes

Someone will need to manage your assets when you die

MANAGERS5

Your estate plan lets you decide

now who the managers will be

BY CREATING A TRUST you can appoint a trustee to

MANAGE THE TRUST

Trustee can be a loved one or professional

trustee

Assets can be transferred to the

trust FOR SAFEKEEPING

Good option if you have minor children

Beneficiaries can benefit from the trust while guarding assets until they are old enough to manage

them

Probate avoidance is a common estate planning goal for many

reasons

PROBATE AVOIDANCE6

Probate can take months, even years, to complete

Assets are frequently inaccessible to intended beneficiaries during

probate

PROBATE MAY BE COSTLY –

diminishes the value of the estate

Probate is public

COORDINATING WISHES

7

A comprehensive estate plan lets you coordinate your wishes in a way that will ensure that they are carried out in the future

Often, there are multiple steps required to ensure that a gift of

property is carried out, for instance

Your estate planning attorney will make sure everything is coordinated

so there are no glitches when the time comes to transfer property or

distribute gifts

Non-Tax Reasons Prevail

Although tax related considerations are often the

motivation behind the desire to create an estate plan

it should be clear that there are numerous non-tax reasons for creating an estate plan that are of equal, or greater, importance

Although tax related considerations are often the

motivation behind the desire to create an estate plan

By Stephen C. Hartnett, J.D., LL.M.

Associate Director of EducationAmerican Academy of Estate Planning Attorneys

9444 Balboa Avenue, Suite 300San Diego, California 92123

Phone: (858) 453-2128www.aaepa.com

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