When many people about estate planning, they often think that it is reserved for only high net worth individuals with millions of dollars and a sprawling family to whom they will distribute their assets.
However, in almost all cases lower-income and middle-class families have assets to that can be protected during their lives, not "spent down" in order to become eligible for end of life care and medical services, and preserved for their families after they have passed.
Indeed, at Bashian P.C. we frequently advise clients as to the many ways they can preserve their assets for future generations, avoid the often painful "Medicaid spend down" process, and still be eligible for end of life/long term healthcare.
According to CNBC, adults who are legal guardians of minors should also use estate plans to protect them. An estate plan helps to prevent families fighting over children, especially if they come with a hefty inheritance of their own. It may also reduce the likelihood of these children ending up in foster care or children's homes because no preparations were made for other people to take care of them.
Finally, adults should use estate plans to protect themselves. Death is not the only time when a person may lose control over their assets. If they are incapacitated a power of attorney may help to ensure their financial obligations are taken care of by a trusted family member or agent. Medical directives also help to ensure a trusted person makes medical decisions if they are unable to make decisions on their own. This may be due to due to dementia, a coma or other illnesses that affect mental capacity.
As for wealthy families, it is even more important to have a plan in place, especially if there is a family business behind the wealth. A succession plan may be needed to ensure the best family member for the job fills the shoes. According to CNN, the new federal tax laws will actually also protect inheritances from taxes for up to $11 million for unmarried individuals and up to $22 million for married persons. Because of this, very few Americans may need to file federal taxes for inheritance until the end of 2025.