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What Exactly Is Estate Planning And When Do We Need It?

Estate planning encompasses a wide variety of subject matter, from how your assets may be titled and who is the beneficiary of your insurance to IRAs and 401(k)s, to the creation of business entities, the establishment of buy-sell agreements, the creation of trusts and gifting during your lifetime. The process allows you, rather than a state’s intestate succession laws, to decide who’s going to inherit your property at your death. Estate planning can be an emotionally charged process for a lot of people.

I like to break estate planning down into three phases. In the initial phase, a client comes to me when they’re healthy and able to make informed decisions about the future of their assets, such as who they’d like to benefit from inherited assets and the way the assets are to be distributed. The second phase is the implementation of the plan, either during life or at death (preferably during life). In this phase we fund the estate plan, or transfer assets according to the plan, to maximize the benefit to your family and minimize the costs and expense of estate administration process, mitigate income and estate tax liability, and minimize, if not eliminate, court-imposed probate fees. The final phase is the post-mortem, post-implementation phase, where someone may have already passed away or we’re making deathbed transfers to facilitate their estate planning. That’s not ideal. We prefer to not be making last-minute estate planning decisions, but in certain circumstances, it cannot be avoided because of poor lifetime planning.

James E. Hickmon PA, North Carolina Estate Planning & Fiduciary Law Site Icon


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