Non-Tax Reasons for Estate Planning

If you read this previous post, you know that I’ve had several recent conversations with families and other professionals that think estate planning is “dead” due to the increase in the estate tax exemption.  Those conversations have continued, which prompted this follow up post.

It’s true that many families believe that estate planning is all about minimizing taxes and distributing your “assets” to the next generation.  I believe that approach places the emphasis on the wrong considerations.  Sure, minimizing taxes and distributing assets are considerations for estate planning, but without a bigger context they will lead to an estate plan that is not much more than a form document.

The emphasis should be on creating a legacy for your family.  No, that doesn’t mean you have to be a gazillionaire . . . it means that you create your plan in a way that will benefit those you want and do so in a way that shares your values, insights, stories and experiences with them and others.  It can even make them better people (or encourage them to stay a “good person” if they already are).

Think about it this way . . . which of these concerns you more:

  • Your family loses 35% of the value of your estate that is over $5 million (if at all) -or- that 50% of the legacy you pass on to them is lost in a divorce?
  • Your young children (or grandchildren) receive less money for their care -or- that they are cared for by someone you would never want raising them?
  • Your child with special needs is disqualified from government benefits -or- that they never reach their full potential because they are limited to government benefits and limited supplementary services?
  • That there is a tax owed when your family business goes to your children -or- that your children fight over who runs the business or hold a grudge because they didn’t want anything to do with the business and are stuck with it anyway

See the difference?  The focus should be on the personal considerations and the legacy that will be passed on . . . taxes can almost always be handled.

Ready to have a plan that is based on who you are and what’s important to you?  Contact us at 616-827-7596 to schedule your Peace of Mind Planning Session.

Michael Lichterman is an estate planning and business planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for finances – it’s about who your are and what’s important to you.  He focuses on estate and asset protection planning for  the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses and pet planning.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

2 Comments

  1. Michael- As a younger estate planning attorney , it is very refreshing to read your blog and your advice about being a “counselor” to your estate planning clients and not just a transactional attorney running the numbers to reduce taxes. Estate planning seems like one of the few practice areas where we can make a huge difference by taking the time to really engage our clients in a conversation about what they really want and need and how to accomplish that together. Thanks for the posts.

  2. As an estate planning attorney in Pennsylvania, I couIdn’t agree more, and I believe this is especially important for young families. Young parents often do not realize the importance of an estate plan because they believe they do not have any valuable assets that will be taxed. I stress the non-financial benefits of estate planning to these parents, such as guardianship.

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