Estate Planning Strategies During Your Peak Career Years
Generation X, the segment of the population that gets less attention than baby boomers and millennials, are in the midst of their peak years of professional achievement and earning capacity. The end of life is still too far away to provoke thoughts of mortality, but the need to institute an estate plan becomes more urgent to protect the assets recently built with hard work and to protect the future financial security of one’s children. A lot of misinformation about estate planning is floating around that can confuse and delay implementing a strategy that best addresses a person’s needs and desires. Executing an estate plan at the peak of one’s earning capacity makes it much easier to keep and grow assets that may be needed post-retirement, or if an unanticipated emergency arises. A discussion of some popular myths about estate planning, as well as some estate planning options particularly appropriate for Gen Xers for long-term financial health, will be explored below.
When people hear the word probate, many associate this procedure with in-fighting among family members over property and the accumulation of high costs to settle a person’s estate. Connected with these beliefs is the assumption that if a will is executed, probate will be avoided. However, this is not true. The purpose of probate is to distribute a person’s assets after death, and a will merely tells the court which heirs should receive certain property. Hiring an attorney and going through the court process is still necessary, though the time and expense does greatly depend on the comprehensiveness of the estate plan overall. The easiest way to avoid probate for most individuals is to create a revocable living trust, though an estate planning attorney should be consulted about whether this option is appropriate.
Another common misconception about estate planning is that no plan is needed if a person has few assets. However, all probate property will have to go through the legal process if proper planning is not used to minimize or entirely avoid this outcome. Assets that are probated without any estate planning documents to direct distribution will be subject to the inheritance laws of the State, which may not match the deceased’s desires. Thus, even individuals with little to pass on would benefit from executing a basic will to retain control over who receives the rights of ownership.
Estate Planning Options
While the Gen X population needs to plan for what happens after death, such as naming guardians for minor children in event of a premature death or incapacity, the main focus for many should be how to manage living for the next three or four decades of their life. One concern for a person during his/her highest earning years is protecting assets from the claims of creditors, and a revocable trust allows an individual to both retain control over and access to the property, while also keeping creditors at bay. Additionally, setting up a charitable trust could lead to significant income tax savings in years where large bonuses or the exercise of stock options are expected. Charitable trusts can be structured in a number of ways depending on a person’s short- and long- term financial needs, and an experienced estate planning attorney can advise on which option best meets a person’s desired goals.
Get Legal Advice
Executing the right estate plan can have a huge impact on your ability to protect your family’s financial future, and the importance of this decision calls for getting solid and practical legal advice about the options worth considering. The Tampa law firm of Bubley & Bubley, P.A. offers comprehensive estate planning services, including asset protection, guardianship, wills/trusts and representation during probate. Contact us to schedule a consultation.