Contrary to popular belief, Legacy & Estate Planning isn’t just for millionaires – it’s for anyone who cares about what happens to their assets after they pass or who desires to leave a record for future generations to be able to access.
That said, Legacy & Estate Planning is particularly important for people in a number of basic life situations:
Married Couples: Each spouse must have a separate will. Joint wills can create legal issues if you both pass within a few weeks or months of each other.
Divorced Couples: Make sure your assets go to the “right” people, especially if you’d prefer that they not go to your former spouse’s new partner and his or her children. To protect your own children, you may need to establish a trust.
Business Owners: Create a succession plan that specifies what should happen to your business, or your equity in the business, if you become incapacitated or pass away. Be sure that the business has enough cash on hand to survive the transition to new ownership.
Future Millionaires: Currently, the estate tax provides an exemption for estates valued at $2 million or less (it will rise to $3.5 million in 2009). This exemption has historically been $1 million and will most likely revert to that level in the year 2011. As a general guideline, if your estate currently totals $1 million or more – or has a strong prospect of exceeding $1 million in value during your lifetime – you should establish trusts to protect assets you may have beyond the $1 million benchmark.
(Special note: Many people are not aware that life insurance proceeds are included in your taxable gross estate and should be included when calculating potential estate tax liabilities.)
Professional Athletes: The unique demands and rewards of excelling as a professional athlete create unique needs and opportunities for both estate and legacy planning. Most sports stars understand the necessity to protect their hard earned dollars, but often fail to receive proper advice and counsel from those charged with directing their affairs. From issues of caring for your family and loved ones to handling the affairs of off-the-field ventures and charitable foundations require the consultation of expert counsel.
Entertainers & Artists: Those who hold valuable intellectual property rights, (copyrights, trademarks, etc.), or derive income from royalty payments need to consider special plans to deal with these unique issues.
We offer many thanks to the talented hand of Robert Weber whose work was originally published in The New Yorker August 16, 1999.