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Taxes and other reasons to have an estate plan

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Taxes and other reasons to have an estate plan

On Behalf of | Sep 17, 2018 | Estate Planning, Firm News

Some people in Colorado may be among the 42 percent of adults who said they did not have an estate plan in a survey conducted by Caring.com. While estate planning may be a difficult subject to address or some might think they do not need a plan because they have few assets, it can be important for everyone.

For wealthy individuals, estate planning can be important in minimizing various types of taxes. Wealthy people may also use an estate plan to set up charitable giving in the form of a family foundation or a trust. Frivolous lawsuits may be a danger for wealthy people, and they can set up trusts or other vehicles that will help protect their assets. They may also want to look into what protection can be offered by insurance. Another element of estate planning may be using it as an opportunity to talk to children about the family wealth and prepare them to inherit and manage it.

All adults, regardless of income, may need to make preparations in case they become incapacitated. This could include powers of attorney regarding the making of financial and medical decisions. People may also want a will or a trust that specifies who should get their assets. Some assets may be passed using beneficiary designations.

There are several other reasons to create an estate plan. Talking to loved ones about it and putting it in writing removes the stress of trying to work out what the individual would have wanted. Some of these wishes, such as choosing a guardian for minor children, can be easily included in a will but could be expensive and time-consuming to put in place in the absence of such a document. An estate plan should be updated regularly to account for changes in financial and family circumstances.