The Wilmington Business Journal says that estate planning should be a serious exercise, together with financial planning. Both are ongoing events, no matter your age or status.
In its article "Do You Really Want To Leave a Large Inheritance?", the Journal advises seniors that having enough retirement funds is critical. But what about this other school of financial planning: Don't Die Rich!
The "Don't Die Rich!" philosophy is based on the premise that money is best used while you are around to enjoy it and appreciate the benefits. Due to lengthening life spans, in many cases, parental assets aren't going to be around to be inherited by children until those children are near retirement age.
So by adhering to the "Don't Die Rich" theory, how do you put your wealth to work?
Consider the following:
You come first, so enjoy yourself. The first beneficiaries of your estate should be you. There's nothing wrong with enjoying your wealth in ways that you can share with your family. Think about spreading the wealth by gifting or making even modest financial transfers to your family heirs. Doing so now, while you are around to see the results, may be better for all concerned instead of leaving them a large inheritance in the future. It's called "gifting with warm hands." Speak with your estate planning attorney about tax implications and strategies.
Charitable giving is another option for your money while you are around. Become a philanthropist! There are many pluses to making a major charitable gift during your lifetime, such as tax benefits and the enjoyment of seeing all the good works that your money will give the charity. Talk to your estate planning attorney about the possibility of creating a Charitable Remainder Trust.
By using this Charitable Remainder Trust, you can put money or securities in an Irrevocable Trust for your charity and reserve lifetime income payments for yourself. When you pass away, the income payments stop, and the remaining trust assets are given to your charity. There are a number of other trust-related charitable giving programs, so talk with your estate planning attorney for details.
Of course, the "Don't Die Rich" plan isn't for everybody, but the thought of seeing the benefits of using your money while you are alive does make sense in many cases.
Reference: Wilmington Business Journal (January 15, 2016) "Do You Really Want To Leave A Large Inheritance?"