Can anyone tell me what the main purpose of estate planning is?

Asked over 2 years ago - Topeka, KS

And, if you could, just basically - what are the best ways to reduce estate taxes?


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Attorney answers (3)

  1. Jennifer Lynn Finch

    Contributor Level 11

    10

    Lawyers agree

    Answered . The essence of estate planning is to establish who will be in charge of your financial and medical decisions when you are no longer capable (either through incapacity or death), to determine how that person will have authority (through private documents or through Probate Court), and to direct who will receive your assets after your death and all bills have been paid. There are many documents that are used individually or in combination to accomplish estate planning depending on the needs of the individual. This is why it is so important to consult with an estate planning attorney rather than just trying to do it yourself.

    Estate taxes currently do not affect estates of less than $5 million. However, unless congress changes the law prior to the end of this year, the size of estate exempt from Federal estate taxes drops to $1 million. Kansas no longer has a state estate tax. Options to reduce estate taxes are also varied and depend on individual circumstancees, so again, it is best to consult with an attorney who is well versed in this field.

    This answer is for informational purposes only and should not be considered specific legal advice, nor does it... more
  2. Linscott Roberts Hanson

    Contributor Level 13

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    Lawyers agree

    1

    Answered . I think the first purpose of estate planning is to get you, the client, to focus on issues surrounding the estate, the family and other possible beneficiaries. "Sum up" your assets and liabilities, take stock of the persons who might be your beneficiaries - any special abilities, any special needs? Identify potential problems. Focus on who would be the best choice to care for you if you are unable to care for yourself and your estate. If you have minors as beneficiaries, who would be the best caretakers of those minors? Who would be the best caretakers of the minors assets?

    Then, in concert with your advisor(s) - attorney, accountant, investment advisor(s) attempt to formulate a plan that carries out the plan that you have developed. Teamwork is essential - each member of the team has something to contribute, including you. You all need to check each other's work, too.

    Tax planning can be important, but for many estates it is not the number one priority. Don't let the tax tail wag the dog.

    Proper use of exemption equivalent(s) is the best way to reduce estate taxes. Charitable giving can be a secondary approach. Sometimes gifts during lifetime can be a way of reducing taxes.

    One of the things you should be seeking is a transition plan that minimizes trouble, expense and delay, and maximizes the benefits, first to you, then to those who succeed you.

    Answering your question on AVVO, does not create a lawyer-client relationship between us. Under the rules of the... more
  3. Maritess Tamunday Bott

    Contributor Level 7

    9

    Lawyers agree

    1

    Answered . The main purpose of estate planning is twofold: (1) plan in the event of your incapacity; and (2) plan for the distribution of your assets upon your death. You want to make sure that all of the things you worked hard for during your life, gets to the right people, at the right time, managed by the person you have chosen, and all at the least possible cost. Who wants to spend more money with probate attorneys or the IRS? In short, if you don't do an estate plan, the default will likely cause your family to incur more costs. Further, you run the risk of your beneficiaries to fight over your money. You never know how people will really act until the money is on the table. I've had probate estates with three attorneys involved, each representing a beneficiary because they were fighting over everything. At the end of the day, it's best for you to have control over who gets what and when. That way, you can have peace of mind.

    Maritess Bott
    mbott@bottestateplanning.com

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