Jul 7th

White Paper: Create a Holistic Estate Plan Now For Bigger Payoffs in the Future

The future is unpredictable, and no one can predict what will come next, which is part of what makes estate planning so difficult. Any simple change in things like the tax code can completely affect your family in several ways.

William “Bucky” Burge, Vice President and client advisor at Whittier Trust believes that considering three main levers in various scenarios is helpful. “These ‘levers’ are all affected by taxes, and assessing them as interconnected parts of a whole can help you come up with a strategy that minimizes taxes and amplifies your wealth,” says Burge.

Below are three levers to consider to help you build an effective tax strategy and estate plan to help fulfill financial goals.

Lever One: What Is Your Lifetime Spending Strategy? 

The main component of estate planning means assessing your goals. Burge believes it’s important you ask yourself a few questions such as, “Where do you want to live?” “Do you want to travel?” Asking yourself these questions will assist you in determining your retirement budget. To secure enough income flow in retirement, you may need to adjust your investing plan to incorporate greater dividend yields and steady payout ratios.

Working with a client adviser can also help you stay honest about whether your lifestyle matches your estate objectives.

“Sometimes we have to have the conversation: If you continue spending at X rate, this is where you’ll be,” says Burge. In situations like these, a client might explore a variety of options, such as adjusting their budget or changing their investing plan. In any scenario, they are calculated movements to guarantee the customer gets the financial flow he or she needs.

It’s also a good opportunity to think about how you’ll handle family gifts and inheritances. The lifetime exemption for gifts is now at its greatest level, at $11.7 million for individuals and $23.4 million for married couples.

As all of this is unpredictable, by the year 2026 it is important to put trust vehicles into place now so you don’t have to scramble when it comes to your estate plan.

Working with a professional who shares a holistic approach and video of your goals and assets for your family is helpful in creating your trust. This way you’ll share similar views and can learn how the business operates before they inherit full control.

Lever Two: How Much Do You Want To Give To Charity? 

Estate planning may help you organize your charitable giving and lay out a clear path for how your present gifts can compound and become a legacy once you’re gone. A well-thought-out charity donating plan may also highlight beneficial tax treatment, lowering estate taxes and increasing the value of future donations.

A smart strategy to implement is a charitable remainder trust. The trust can help provide an income stream during your lifetime along with helping reach your charitable goals. Through the trust, you can transfer assets like highly appreciated stocks into an irrevocable trust and this would remove the assets from your taxable estate. The trustee can sell the asset at market value and reinvest, allowing for an income stream for you or a beneficiary. This method can help you save money on taxes on highly valued things that you may not utilize.

Lever Three: What Are You Leaving To Your Heirs?

A big inheritance tax payment is the last thing you want to give your beneficiaries. Making a strategy now can help you streamline your legacy and make your future easier. Burge says that many clients come owning multiple properties in their names or in an LLC. A quick fix for this is putting each property in a separate LLC, allowing for increased asset protection and the potential avenues for tax savings.

Creating an irrevocable life insurance trust can help minimize taxes. An irrevocable life insurance trust can be used to safeguard assets during the transfer of wealth. However, it is simpler to put these tactics in place sooner rather than later.

Creating these vehicles takes time and knowledge, securing your time and a trusted advisor are proven to be helpful in preserving your wealth.

Working with an estate planning attorney can help you take advantage of the historically high lifetime gifting limit for a maximum impact on your children. Your advisor can help create a personalized trust to ensure your children will be effective with your wealth.

More than a series of tax-advantaged measures, estate planning is a complex process. It’s all about making sure your legacy means something to you and your family. That’s where a comprehensive approach, such as Whittier Trust’s, comes in handy.

As a current client advisor, Burge believes disclosure that clients are comfortable with helps the estate plan achieve the important goals of financial and intangible goals are met, along with your family harmony and legacy remaining intact.

For more information, you can download the full report here or visit Forbes to read more.

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