Estate planning is an essential tool to ensure your money and other assets are transferred pursuant to your wishes upon your death. If you are bequeathing money to a loved one in your will, it is important to keep in mind that large sums of money can be quickly and easily squandered. Financial advisers who work with individuals who suddenly receive a windfall say the money often vanishes quickly. Proper estate planning and the use of wealth transfer tools can ensure the financial well being of your family is protected.
The most recent available information from the Federal Reserve’s Survey of Consumer Finances states more than nine million American households received an inheritance of more than $100,000. The so-called baby boomer generation, those Americans born from 1946 through 1964, is expected to inherit approximately $8.4 trillion over the course of their lifetimes. As the population ages, a large amount of the nation’s wealth will be transferred through wills and other estate planning tools.
Although a number of financial strategies may help those who receive a large inheritance hang onto the money longer, one of the best tools an inheritor can use to protect their financial health is to plan their own estate. Experts suggest setting up a springing or other power of attorney so a person of your choosing can handle your finances if you become incapacitated. You should also draft or update your trust or will to ensure the proper individuals will inherit after your death. Beneficiary designations for any insurance policies and retirement accounts should also be updated regularly, especially after a divorce or other significant life event. It also important to properly estimate the taxes you may owe on your inheritance. Giving to charity may help you minimize your tax bill.
Many of our clients are worried that their child’s spouse could take inherited property in a divorce. Wisconsin law does not allow a spouse to claim inherited property of the other spouse, so long as the property is kept separate after the inheritance. In other words, if you give property to your child, and your child keeps that property in his/her own name, your child’s spouse cannot get those assets in a divorce. However, if your child puts those assets in a marital bank account even for one hour, they belong half to the other spouse.
An attorney who is experienced in estate planning can assist you with a variety of avenues through which to distribute your inherited wealth to your children or other selected beneficiaries. For example, a trust may be established to protect spendthrift children or shield assets from estate taxation. A wills, trusts, and estate planning lawyer may also be able to assist you with making tax-free gifts to your loved ones during the course of your lifetime.
Estate Planning helps individuals transfer wealth from one generation to the next, or to charities or other selected people. It also allows parents to specify who will look after their minor children in the event of their death. Common estate planning tools include wills, trusts, insurance, limited liability companies, powers of attorney, health care documents and more. If you have questions regarding completing a unified estate plan to protect your family, contact a qualified Wisconsin estate planning lawyer today.
The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.
Contact our office by calling (608) 268-5751 to schedule a free consultation or use our online contact form.
Too Rich, Too Soon, by Jessica Silver-Greenberg, Wall Street Journal