Defining the Distinctions Between Traditional Estate Planning & Legacy Wealth Planning
Estate planning involves varying different strategies. Exactly how to proceed will depend on the nature of your wishes and the extent of your assets.
Traditional Estate Planning
Most people will engage in traditional estate planning. You may have been successful throughout your life, and you may have resources to leave behind to your loved ones. However, you may have simple estate planning needs.
You are not concerned about the estate tax because your assets do not exceed $5.34 million in value. Asset protection may not be a concern, because you have no reason to assume that anyone would be seeking to attach any of your resources.
And, you may not be in a position to leave behind vast contributions to charitable causes for many years after your passing.
A basic, traditional estate plan will generally include a Last Will or a Revocable Living Trust. Why would you want to use a Revocable Living Trust rather than a Last Will? Revocable Living Trusts facilitate transfers of assets outside of the process of probate.
If your estate goes through probate because you used a Will to arrange for the distribution of your personal property, the heirs to the estate will have to wait for their inheritances. Probate can be time-consuming. There are also costs that can pile up during the probate process.
Assets that are conveyed into a Revocable Living Trust will find their way into the hands of the beneficiaries in a much more timely manner.
If you use a Revocable Living Trust you could also include the choice of a successor or disability trustee who would be empowered to manage the funds in the trust in the event of your incapacitation.
Advance Healthcare Directives are also advisable for those creating a traditional estate plan. These would include Durable Powers of Attorney and a Living Will.
Legacy Wealth Planning
Those who have been able to accumulate significant wealth should engage in a process called Legacy Wealth Planning. This could involve positioning assets in a tax efficient manner to mitigate estate tax exposure.
People of means may also want to utilize asset protection strategies to keep resources safe from creditors and claimants.
You can also consider leaving behind a legacy of charitable giving. Many wealthy people will do this through the creation of charitable family foundations. A charitable trust may also be a useful addition to your legacy wealth plan.
Estate Planning Consultation
Regardless of the extent of your assets, estate planning is a must. If you would like to discuss your unique situation with a licensed Cincinnati estate planning attorney, don’t hesitate to contact our firm to request a consultation.