National Estate Planning Awareness Week, the third week in October, was adopted by Congress in 2008 to help the public understand what estate planning is and why it is a vital component of financial wellness. It is estimated that more than half of all Americans do not have an updated estate plan. However, taking this important planning step can save your family both time and assets. Families who do not plan often spend far more on unanticipated problems caused by their failure to plan than the cost of the actual plan.

FIND A GOOD ESTATE PLANNER

One of the best and easiest ways to find a reputable trusts and estates attorney is to ask for a referral from a trusted financial advisor, accountant or insurance agent. The referring advisor may attend the initial meeting to help guide you through the process. This is often beneficial. It is important that all your advisors know each other and communicate with one another to give you the best advice possible.

EVERYTHING GOES TOGETHER

Many estate planners take a client centered approach to estate planning. Think of a wheel with the client at the center or hub and the client's advisors as spokes circling around the client. When each advisor knows what is going on with the other facets of the plan, there are no surprises and the best possible outcomes are achieved for the client.

For instance, purchasing life insurance will increase a client's taxable estate, unless the policy is applied for and purchased by an irrevocable life insurance trust that is property established and maintained. So it is important that you speak with your attorney before you apply for a life insurance policy. Likewise, your attorney can provide an estimate of any estate taxes due on your death, which you can share with your life insurance agent to determine how much coverage you will need.

Planning can also result in income tax consequences. Your accountant will need to know if trusts are established and funded during your lifetime and if you plan on making any lifetime gifts. If you make an outright gift of an asset, the person you gift the asset to also takes your basis in the property for tax purposes. If you are gifting low-basis stock or a home that you purchased in 1960 for $35,000, you may want to re-think the best way to get that asset to your heirs.

ACHIEVE YOUR FINANCIAL GOALS

Your advisors can offer solutions to meet your goals and advise on issues that may not have come to mind. Estate planning is vital to achieving your goals in an efficient manner that maximizes estate and income tax savings for both you and your heirs. Our Private Client group is here to help you reach those goals. We also have a team of tax attorneys for more complex issues and top-rate divorce and family law attorneys to advise when needed. Contact us today to get started on your estate plan or to update your current plan.

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WHO NEEDS ESTATE PLANNING?

For many people, the value of an estate plan will far exceed its cost due to tax savings. Furthermore, estate planning is not just for individuals who have a net worth in excess of state or federal exemptions (currently set at $1 million for MA, and $5.34 million for the U.S., but subject to change). The following people can greatly benefit from estate planning with experienced legal counsel:

  • Individuals or couples who have dependents or beneficiaries with special needs.
  • Adoptive parents, who need to make special provisions for inheritance that differ from state law provisions applicable to those without a legally enforceable plan.
  • Other non-traditional families, such as those of unmarried couples or domestic partners.
  • Married persons who have previous spouses or children from a prior marriage.
  • Those who have special charitable goals.
  • Those who have ownership shares in a closely held business that could suffer grave disruption from an inheritance battle or significant death taxes on their estates. Such people can benefit from a well-structured agreement providing for life insurance on key owners in amounts adequate to fund the purchase of the decedent's shares, according to valuations set by agreement.

Burns & Levinson is a Boston-based, full service law firm with more than 125 attorneys in Massachusetts, New York and Rhode Island. The firm has grown steadily and strategically throughout the years, and has become a premier law firm with regional, national and international clientele. Core areas of practice are Business Law, Business Litigation, Intellectual Property, Private Client Legal Services and Real Estate.

To learn more about our Trusts & Estates practice, visit burnslev.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.