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Estate planning is the ultimate exercise in preparation

by | May 21, 2014 | Estate Planning |

Successful men and women in California know that planning and preparation are critical ingredients in the recipe for success, so it should come as no surprise that preparation is also the key to maximizing that success for the greater good. People chart their course in a career much as they do in life, and with careful preparation and core values as guiding principles, they may grow to prosper and enjoy the wealth they have worked hard to create.

But people also want the best for their children, which is why Californians with substantial estates also work hard to create an estate plan that will benefit their future heirs. A successful estate plan accomplishes several goals simultaneously. It enriches the future generation, it provides asset protection from unnecessary government taxation, and it gives the benefactor peace of mind that his or her legacy will remain intact even after he or she is gone.

One aspect of an estate plan must be making sure that the heirs are prepared to inherit and wisely manage their new wealth. A popular way to encourage children to act responsibly is through the use of an incentive trust. An incentive trust rewards heirs based upon their own success in their lives by, for example, matching their work income with an equal distribution from the trust. Another common way to control trust disbursements is upon certain milestones in life. For example, a trust can dictate that an heir receive a certain amount upon their 30th birthday, upon graduating college, or upon marriage.

With the help of an experienced estates and trusts attorney, people should explore and collaborate to find the right combination of legal and financial instruments to maximize their estate plan. In many ways, it might be the most important planning they ever do.

Source: Forbes “5 Tips Before You Leave Your Kids an Inheritance,” Robert Pagliarini, May 12, 2014

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