Why Is Estate Planning Important?
- Guardianship of Minor Children
- Disposition of Property
- Adequacy/Liquidity of Estate
- Asset Management
- Business or Farm Continuity
- Tax Savings
Guardianship of Minor Children
Who will raise your children if you and your spouse predecease them? People with very modest estates or those with no probate estates still need a Will in order to name a guardian for their minor children. This may but does not have to be the same person you name to manage your children’s inheritance. You can provide suggestions, guidance and directives as to the standard in which you want your children raised and as to what are acceptable or nonacceptable expenditures.
Disposition of Property
Who will inherit your property? This decision can be complicated when there are children from a prior marriage or when your children have different needs.
Adequacy/Liquidity of Estate
Are your assets adequate to provide for your family and, if adequate, do they provide the liquidity necessary to pay death taxes, expenses of administration, and funds for family needs without forcing the sale of nonliquid assets at a disadvantageous time? Life insurance programs should be considered to meet these needs.
Asset Management
Who will manage your assets if you become incompetent? Who will manage your estate upon your death? Who will manage funds left to minor children? Who will handle the affairs of a special needs child?
Business or Farm Continuity
Are you concerned about the succession of ownership and control of a family business or farm? You may need a Buy/Sell Agreement and you may need life insurance to fund this Agreement. You may also want to consider a Family Limited Partnership or a Limited Liability Company to assure continuity and control.
Tax Savings
Death taxes can take a significant bite out of inadequately planned estates. For years 2011 and 2012 the exemption from federal estate taxes is $5 million and there is no Wisconsin estate tax. However, current law provides that in 2013, the exemption drops back to only $1 million and both the federal and Wisconsin tax exemptions are subject to change. So, if you and your spouse's combined estate exceeds $1 million (and you expect to live past 2013), there are many estate planning measures you can take to minimize or even possibly eliminate death taxes.
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