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Nitesh Patel
Finance | Financial advice

DONíT THINK YOU NEED AN ESTATE PLAN? THINK AGAIN
By Nitesh Patel

Youíve been accumulating assets and saving since entering the workforce. The question is: Do you have a plan in place for these assets after your death? If youíre like most people, you donít think you need an estate plan. Do any of these reasons sound familiar?

I donít have enough assets to worry about estate taxes.

Forget taxes for a minute. There are a number of non-tax reasons for estate planning. If you have not done any planning, state law determines where your assets will pass when you die. There is no guarantee the legal system will make the same decisions you would have made. Putting your directions in your estate plan is the only way to ensure that your wishes are followed.

Letís assume assets would be distributed just as you would like. There are still several reasons to plan. First, in your will you can determine who will handle your estate when you die Ė called the personal representative. A will also allows parents to nominate who will take care of their minor children. Although the court makes the final appointment, naming a guardian ensures your wishes are known, and in most cases, followed.


I already have a will.

Some situations are more complex and may require more than a will. Non-traditional family dynamics, tax planning issues and privacy concerns might be better handled through a trust. Marital property agreements clarify ownership of marital and individual property. Even if your will plans for the distribution of property, donít forget to address incapacity. You should consider naming someone as the financial power of attorney to handle your monetary affairs. Also, consider naming someone to be your health care power of attorney to make health care decisions should you be unable to make them yourself.

The estate tax has been repealed.

Itís true the estate tax has been repealed, but so far only in 2010. Over the next several years, the amount that can be passed at death free of estate tax will increase and the estate tax rates will decrease. In 2010, the estate tax is repealed but is replaced with income or capital gains tax. The following year, the changes will ďsunsetĒ back to the original estate tax law of 2001. So, if you donít want your heirs to pay taxes on your estate, youíll have to die in 2010.

The future of the estate tax is uncertain at this point. However, without planning you have no assurance that your wishes will be followed or your goals accomplished. Itís better to put a plan in place and make changes as theyíre needed.

Because everyoneís situation is unique, it is important that you work with planning professionals to be sure your goals are met. Financial representatives and estate tax attorneys can help you prepare a plan that meets your objectives and helps reduce or eliminate taxes, create liquidity for any taxes that are due and help keep your estate intact for beneficiaries. More importantly, planning helps ensure that your affairs proceed properly when youíre no longer in control Ė perhaps the best peace-of-mind of all.

Nitesh Patel is a financial representative with the Northwestern Mutual Financial Network based in Clearwater for The Northwestern Mutual Life Insurance Company, Milwaukee, Wisconsin). To reach Patel, call (727) 799-3007 or e-mail nitesh.patel@nmfn.com.



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