Accumulating wealth solely for the purpose of leaving a hefty estate is not the only way to look at estate planning. What's wrong with enjoying your wealth before you pass?
Make no mistake. Estate planning is, and should be, a serious business, along with financial planning and wealth management, notes The Wilmington Business Journal. These are all on-going activities and part of a well-managed, successful life, at any age or stage.
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. 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 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.
"Don't Die Rich" may not be for everyone, particularly for those who are struggling simply to pay their bills and maintain their lifestyle. But there are elements that may be applicable for many people. The important concept is to consider enjoying the assets that you have while you are still living, increasing your fulfillment exponentially.
Reference: Wilmington Business Journal (January 15, 2016) "Do You Really Want To Leave A Large Inheritance?"