What are the four most common goals? The four most common objectives when you’re doing your estate planning? We talk with thousands of people, like every year, hundreds of people come through. We’ve been doing this for years now and literally, there were thousands of families that we were able to talk with.
I think the four most common things that I hear people talk about are these. Number one, saving taxes. Number two, making sure that you’ve got a plan for where your assets get distributed after you pass away.
Number three, keeping the sanity up and the insanity down. Keeping things sane if there’s a medical emergency that causes an incapacity. The fourth most common objective is to do some charitable planning.
How does all that tie together? Tax savings. We pay taxes when we earn it. We pay taxes when we save it. We pay taxes when we spend it. There’s the gift tax when we make gifts. Then we pay taxes when we die too.
Don’t we pay enough? Yeah, I think we do. First thing, let’s save some taxes and not waste it. IRS isn’t entitled to any more of it than they have, than you absolutely have to give them.
Second, you wanna make sure what your wishes are, that that’s where it goes. If you say, “I want my wedding ring to go to that child,” that’s where it needs to go. Your wishes need to be honored.
Things need to be split according to your wishes. If you say, “this one particular child, I want to help a little more,” for whatever reason, put it in the documents, make it valid.
Third, that thing nobody, none of us really wanna talk about. We talk about planning for death, but not a lot of people talk about planning for old age. That’s the scary part. I think nobody wants to think that that might happen to them. Sticking our head in the sand isn’t gonna help.
So planning for who’s gonna be in charge of the finances? Who’s gonna be making medical decisions? What kind of choices you would want. Do you wanna stay at home? Are you okay with going to a nursing home or other kind of living facility? Do you want a big facility or do you want a private group home?
All those choices. Then you gotta figure out how to pay for each of those choices, whatever they are. If it’s stay at home or you’re gonna bring people in- “My daughter’s gonna move in with us,” Does she know that’s the plan? Make sure all these things have real plans behind them.
Fourth is charitable giving. A lot of our clients, they’re leaving a portion. We have a few clients who are leaving their entire estate to charity. Making sure you do it so that you pay as little taxes. Take advantage of the tax opportunities there to save taxes. Make sure that you’ve got a long-term plan for what those charities can use it for.
Make sure they’re gonna be around for a long time, and if not, that there’s a plan to make sure it carries over to their successor or another charity that does the same kind of thing. Those are really the four most common goals or objectives when you’re doing your estate planning.
Summary
The four primary goals in estate planning, as commonly voiced by individuals, are as follows: First, there’s the aim to save on taxes by minimizing the financial burden. Second, it’s about ensuring that your assets are distributed precisely according to your wishes after your passing. The third goal revolves around maintaining stability amidst potential chaos, particularly in the event of a medical emergency leading to incapacity. Lastly, charitable planning which involves optimizing tax benefits and ensuring long-term sustainability for the chosen charity. These objectives collectively define effective estate planning.
