Estate planning is a must for all responsible adults, but there are two different approaches that can be taken. You can cover the basics with a bare-bones plan, or you can engage in the process of legacy planning, which is a more comprehensive form of estate planning.
The facilitation of effective asset transfers will be at the core of your legacy plan from a financial perspective. There are different types of trusts that can be utilized, and the right choice will depend on the circumstances.
Some people that have been highly successful from a financial perspective have to be concerned about the potential impact of the federal estate tax. It carries a 40 percent top rate, so it can significantly reduce the inheritances that you will be passing along to your loved ones.
It is only a factor for high-net-worth individuals because there is a multimillion-dollar exclusion that can be used to transfer a certain amount tax-free. If your estate is going to be subject to taxation, there are steps you can take to reduce the burden.
Nursing Home Asset Protection
Nursing home costs are another potential source of legacy erosion. Medicare does not pay for long-term care, and most seniors will need some type of paid care eventually.
In the Memphis, Tennessee area, you can expect to pay somewhere in the vicinity of $90,000 for a year in a private room in a nursing home. The average length of stay is 12 months, and a married couple may face two different sets of nursing home bills.
Medicaid will cover long-term care, and you can potentially gain eligibility for this need-based program if you convey assets into an irrevocable Medicaid trust. We can help you take the right steps to preserve your legacy for the benefit of your loved ones.
Matters of the Heart
There are a few things that you can do to leave a lasting impression when you are devising your legacy plan, and family heirlooms will be part of the equation.
You can evaluate all the items that you have to pass along and choose the ideal caretaker for each object. Some people give the gifts while they are still living, and this can be a very meaningful act.
A lot of people are interested in learning about their roots, and the companies that conduct genealogy probes are kept very busy. This being stated, there is no substitute for the sharing of direct personal experiences.
When you are developing your legacy plan, you could write an account of the family history that you remember. If you take this step, your loved ones and future generations will have access to a valuable source of information going forward.
Ethical wills have been utilized since biblical times. This type of will is not legally binding, and it does not have anything to do with asset transfers or health care decision-making.
In an ethical will, you share your moral and spiritual values. Over the years, you have probably been asked for advice during difficult or confusing times. You will not be around to give it forever, but these values can be embedded in the firmament of your family.
If you are in a position to do so, you may want to leave behind a legacy of charitable giving. A private family foundation is a possibility, and many people are surprised to hear that most foundations are funded with less than $1 million.
There are also charitable trusts that can be utilized, and donor advised funds are quite popular. With a donor advised fund, you make a single contribution, but you can advise the fund to support multiple charities.
Schedule a Consultation Today!
These are a few things to think about, and we can make further suggestions when you consult with one of our attorneys. If you are ready to set up an appointment at our Memphis, TN estate planning office, we can be reached by phone at 901-763-2500 or 866-997-6325 or fax us at (901) 763-2525.
We also have a contact form on this site you can fill out if you would prefer to send us a message.