Estate Planning Protects Your Legacy and Loved Ones

With the holidays in full swing, it’s easy to look at the family gathered around the table and feel grateful for many things. While year-end is often a time for reflection and gratitude, it’s also typically a time to wind down and tie up loose strings.

“One of the most important things you should tackle right now,” advises Jim Rein, Next Gen lead for Pinion, “is to ensure your family’s future business goals are secured. The one guarantee in this life, is there will come a day when you will no longer be in charge. How successfully you transition or transfer your business is highly dependent upon setting up an estate plan.”

“Less than 10% of family businesses successfully pass to the third generation.” Studies show this is due to: inadequate estate planning, insufficient capitalization, and failure to prepare the next generation.

Considerations for Your Estate: How Operations Fail at Transitioning
Rein describes a common scenario he comes across – that many business owners are the unfortunate victims of thinking a will is enough to do the job of securing their legacy.

During a tour of a family operation in the Midwest, a Pinion client pointed out a neighboring operation. “You should have seen that place 10 years ago. It was beautiful…well run, well-maintained equipment, and just a really great operation,” he said.

He continued to share that the patriarch passed away and the operation fell into disarray and the family members were fighting over the estate. “I heard he did some estate planning like a will or something, but it obviously wasn’t enough to keep the thing going the way he wanted…what a shame.”

Five Things an Estate Plan Will Do:

  1. Make your wishes clear and protected. Perhaps the greatest gift you can give yourself and your loved ones is peace of mind. Knowing your wishes are laid out in writing and supported by legal documentation ensures you are protected in your passing.
  2. Minimize tax burden on beneficiaries. The government can currently tax up to 40% of an estate over $12.06 million. Too often, an ill-planned gift creates a tax bill that heirs can’t afford without selling part or all of the estate. A tax consultant can help navigate the gift and estate tax exemptions so that more of your assets pass to your loved ones.
  3. Protect family relations and minimize disputes. Money, business, and land are all deeply personal. An estate plan minimizes room for strife, making it easier for grieving family to process together rather than against each other.
  4. Plan for charitable giving. Whether you want to gift cash or specific assets, there are several charitable vehicles you can use to make sure gifts are made according to your wishes and income and estate tax liability is minimized for recipients.
  5. Protect family wealth and legacy. Without a proper estate plan, a probate court will most likely determine what happens to your assets. This can be expensive and take months and years to settle and gives family limited control. An estate plan ensures your assets, land, investments, retirement accounts – all of it lands in the right hands without a lengthy, public, and expensive probate. This is the best way to protect your family, your legacy and your life’s work.