Hello my name is Chad Taylor, Managing Partner with MDT Financial Advisors here in Houston TX.
Careful estate planning is so important for so many reasons. The fact is—leaving a legacy is about much more than just figuring out a way to avoid taxes. First, we need to start by avoiding common pitfalls.
It is not unusual for someone to not have their beneficiary designations completely correct. Unfortunately, the consequences of this avoidable mistake usually surface when it’s too late. Even though folks insist prior to having to make claim for benefits that they were sure everything was in order, we find out the hard way that we should have double-checked and confirmed them all in writing.
The reality of what happens when you’re gone is this: Your assets will go to Congress (via the Federal and State Treasury), the company we work for, heirs, or friends. So there are basically four options of where the assets can go.
Under your existing plan, how much is going to Congress, how much is going to your company and why? Why wouldn’t we leave as much as possible to family? By voluntarily including one more key recipient, charity, in your plan, you can virtually disinherit “Congress” and “company,” thereby maximizing what will go to your heirs or friends.
Estate Planning isn’t just about dying. It’s about whether you’re going to endow somebody else’s values by involuntarily sending your assets through the tax system, or endowing your own values through the careful planning that will directly fund the people, causes, and institutions you deeply care about.
Another planning aspect to consider carefully is this: Fair, Equitable, and Equal are three entirely different terms. Sometimes leaving substantial wealth to family can be as detrimental as NOT leaving it. So, almost as important as the question of “How much?” is the question of “How?” Being “equal” in how you give it might help one, yet might destroy another. Here’s practical reality: It’s very different from family to family—and it’s very different from child to child.
So, it makes sense to know IN ADVANCE with absolute confidence the answers to the following questions about what happens to your wealth once you’re gone:
1) To Who?
2) To Where?
3) How Much?
Doing so will help give you the clarity to incorporate “giving strategies” that fund the causes, communities, institutions, and missions you care about. And it pays to re-evaluate from time to time since life changes with different situations, people, and even interests. Thank you and have a good day.