"Is a Basic Estate Plan Enough?"
Is a Basic Estate Plan Enough? Are you in the process of estate planning? If so, you will find yourself faced with the question of whether or not a basic estate plan is enough for your estate. If you only have one or two beneficiaries and if you have very little property to bequeath, a basic plan may be best for you. For those with more complex assets and families advanced planning is better. There are three disadvantages to settling for a basic plan when your estate requires more. Cannot Reduce Estate Taxes If you pass away in 2010, your family will not owe federal taxes on your estate. This is because the 2009 exemption level of $3.5 million was not renewed by Congress, at least not as of this point, fall 2010. Therefore, current law provides that in 2011 all estates worth more than $1 million dollars will be subject to estate tax. Don’t forget the full death benefit amount on your life insurance is includible in your taxable estate, even if it gets paid to a beneficiary! This lower exemption threshold is a great reason to have an advanced estate plan if your holdings are near or worth more than the expected exemption level. A basic plan, namely a Last Will and Testament, cannot provide a way to reduce estate taxes. Your family could be hit with a very large tax bill if you pass away with a basic plan and a high net worth. You can create tax planning within a Last Will but it requires two probates to make it work. That is not appealing, or smart. Cannot Leave Special Inheritances If you have minor children, a family member with special needs, a pet, a loved one who is bad with finances or a blended family, you may need a plan that allows you to create special inheritances. A basic plan does not. In a Last Will and Testament, unless there are trusts created within them – testamentary trusts, overseen by the court system - inheritances are left directly to the beneficiary. If your loved one is underage, property or funds will be held by a guardian. For special needs family members a direct inheritance may reduce or eliminate their government aid. For blended families, items you leave to your spouse may not necessarily pass to your children later. With an advanced plan, special trusts provide flexibility to help you provide your loved ones with a steady income and inheritance protection. Cannot Protect Assets Basic planning does not offer any form of asset protection for your or your family. This means assets can be taken at any time to settle a debt or lawsuit. With advanced planning, Irrevocable Trusts and Limited Liability Companies offer you and your family proper asset protection. Experienced estate planning attorneys Oklahoma City OK of the Parman and Easterday offers estate planning and business planning resources to residents of Oklahoma City OK. To learn more about these free resources, please visit http://www.parmanlaw.com/. today