There are those who decide that they don’t need an estate plan because they are not going to be exposed to the federal estate tax.
Whether or not you are exposed depends on whether the net fair market value of your total assets exceeds the estate tax exclusion. In 2013 this exclusion is $5.25 million. Anything that you have beyond this that you want to pass on to your heirs is potentially subject to the estate tax.
In truth there are other reasons to plan your estate with the benefit of expert guidance. Incapacity planning is one factor to consider. People are living longer and longer lives, and 45% of those who are at least 85 are suffering from Alzheimer’s disease.
A guardian could be appointed by the state to handle your affairs if you were deemed to be unable to make sound decisions. You can choose your own potential decision-makers by executing durable powers of attorney.
There are those who would like to protect assets from creditors or litigants. This can be done with the proper planning.
Small business succession planning requires some specialized strategies. This extends to farmers and ranchers who are making preparations for the future.
If you have someone with special needs in the family who is receiving government benefits you must take very specific steps that make resources available without jeopardizing benefit eligibility.
Estate planning is not something that is only necessary for the wealthy. Most people who have been successful enough to even consider the subject would certainly benefit from a professionally prepared estate plan. You should create an estate plan not so much based on how much you have; rather, it should be done to address what you want to have happen at different stages in your life and in the lives of your loved ones.
Author, President and Founding Attorney
Parman & Easterday