It only seems natural for Washington, DC residents to want to leave a legacy for their heirs. However, without a well thought out and executed estate plan, that legacy could end up more of a burden for heirs. Changes in the Tax Code, regulatory issues and erratic financial markets can all significantly affect estate planning.
The first priority for any Washington, DC resident may be retirement. Without this, there could be no legacy to leave. However, all of the risks associated with building a retirement plan and an estate plan need to be addressed before the first document is drafted. One of those risks is the possibility of an unexpected illness or the need for long-term care. The fact that people are living longer only serves to increase the need for this type of assessment.
Having all of the information necessary to make informed choices regarding an estate plan is crucial. Gathering all of the necessary financial information of an individual can give a clear picture of where that person is financially. This creates a starting point from which to work.
A review of the tax implications associated with a person's assets helps in developing an effective estate plan. The goal is to reduce the tax ramifications both during the life of the individual and upon death. Without making these determinations, the estate could end up owing a significant amount of taxes, which could diminish the value of the asset or assets inherited.
Estate planning can be as simple or complex as is necessary to achieve the goals of an individual. A person can leave a significant legacy to his or her heirs that will not decrease in value due to poor planning. Knowing that the individual did everything possible to protect his or her assets and the heirs that will receive them could provide peace of mind for everyone involved.
Source: Forbes, Leaving A Legacy, No author, Jan. 13, 2014