Most people know by now that unless they are members of the elite group of Americans with a net worth of over $5.3 Million ($10.6 Million for married couples), they likely won’t need an estate planner to manage the potential tax on their estates.
So, far fewer people are planning their estates these days.
That’s unfortunate. You see, tax saving never was the primary reason to engage in estate planning. Consider the benefits that flow from estate planning that have nothing to do with taxation:
First, a carefully planned estate can provide legal protection for your loved ones’ inheritances which they could never achieve themselves after your death. In the absence of this planning, there is an unnecessarily increased risk the inheritance you pass could land in the hands of a claimant or a divorcing spouse of a child, or the future stepchildren of a spouse who survives you.
Second, you have the ability through an estate plan to nominate the individuals you want to act for you should you become incapacitated and, if you have minor children, the individuals who will act as their guardian should you die before they reach adulthood.
Third, without an estate plan, your estate likely will require a probate upon your death and could require a conservatorship should you become incapacitated.
The bottom line? Estate planning still makes sense, even though it may not save you a dime in taxes.