Preventing Expensive Mistakes with Creative Estate Planning

Posted by Christopher Musuneggi on August 11, 2017  /   Comments Off
By: Mary Grace Musuneggi, CLU, ChFC, CFS, RFC

plan ahead 3We highly recommend that all clients do their Estate Planning. In fact, sometimes we are fanatics about it. That is because over the years we have seen a lack of documents, insufficient planning, or the wrong arrangements cause huge expenses, legal hassles, and family issues.

For married couples in a first marriage, the process seems simple. He leaves his stuff to her, she leaves her stuff to him. If they have children, the stuff is divided equally among the children if something happens to both parents.

But what if this is a second marriage or a blended family? What if the children are young? (Children under the age of 18 cannot inherit in most states.) What if there are dependent parents, children or siblings with a disability, or a charity they want to contribute to?

What if you were single always, or single once again? What if you are fearful of leaving an inheritance to children who are not responsible with money or have a drug or gambling problem?

Creative Estate Planning can be the solution in all of these situations.

Sound expensive? Not really. Many people try to avoid the cost of doing Estate Planning, but after their death their heirs spend thousands and thousands on unwinding a poorly planned estate.

Sound complicated? Doesn’t need to be. We have plenty of clients who have used creative arrangements to see their wishes for heirs are followed.

Consider these Creative Estate Plan possibilities:

  • A trust that holds assets for children until they have accumulated a specified net worth of assets on their own, inspiring them to work hard like their parents did to create the estate they are passing on.
  • A plan where a child gets income instead of assets, so he doesn’t treat the inheritance like he hit the lottery. (This also keeps him from being the “bank” for his friends who want to borrow money.)
  • A program that requires heirs use some of the inheritance to hire a financial consultant and a CPA to make sure that money is invested and used wisely.
  • A plan to provide income for an elderly parent, so that grandchildren will not need to be concerned with their financial or Long Term Care needs.
  • A trust designed for a blended family to see that the assets of the husband go to his children and the assets of the wife go to her children.
  • A program to arrange for money for an adult child to put towards health costs, education funding, or starting a business. If not used for these purposes, the child will get the balance at retirement. 
  • An Estate Plan in which money goes to the Pittsburgh Foundation to be used for a music scholarship in honor of a deceased sister who taught music.

These are just a few options. You can create your own legacy. It does not need to be expensive, and it does not require having a large estate to start with. Whatever money you have that may be passed on can be arranged whatever way you want. Today, home ownership and a 401k can rank you up there with those who have significant assets.

But even if your assets are just your iPhone, car and dog, you have an estate. And you want to be sure it gets to the right people, in the right way, at the right time, for the least cost and taxes.

Let’s get started on your Estate Planning. Call us today at 412-341-2888 to schedule a time to chat about your options. And if you have other ideas for Creative Estate Planning, we’d love to hear them!

 

 DON’T FORGET…

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  • If you think putting assets in someone else’s name, or adding their name to your accounts, is the way to avoid doing Estate Planning, please know: This often causes more potential problems than it solves.
  • If you are passing money by beneficiary (an IRA, 401k, life insurance) this money does not pass through your will. So if your spouse is your beneficiary, but you plan in your will for some money to go to a child or parent, it may not get there.

 

 

 

This information should not be considered as tax or legal advice. You should consult your tax or legal advisor regarding your own tax or legal situation.

 

 

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