Hey Love!
Welcome to “Money Monday,” our weekly blog series dedicated to helping you build, protect, and pass on your wealth. At L.A. Mason & Associates, we believe every family deserves a strong financial future, and estate planning is the cornerstone of preserving wealth across generations. In this post, we’ll explore five essential steps to ensure your loved ones are protected, your wishes are honored, and your legacy continues for years to come.
1. Start with a Solid Will
A will is the most fundamental estate planning document. It outlines how you’d like your assets—such as your home, bank accounts, and personal belongings—distributed when you pass away. If you pass away without a valid will (“intestate”), state law will determine who inherits your assets, which could be contrary to your wishes. Under IRS Code § 2031, the total value of the decedent’s gross estate must be reported, and a clear will can help your family properly account for everything you own.
Pro Tip: Review your will every two to three years, or whenever you experience major life events like marriage, divorce, the birth of a child, or significant financial changes.
2. Establish a Trust
Trusts aren’t just for the ultra-wealthy. A trust can help Alicia—our community-focused, family-first professional—manage and distribute assets more efficiently while also potentially minimizing estate taxes. According to IRS Publication 559, certain trusts can help reduce tax obligations by allowing assets to pass directly to beneficiaries, bypassing the often long and expensive probate process.
Pro Tip: There are multiple types of trusts:
- Revocable (Living) Trust: Provides flexibility to amend or revoke as needed.
- Irrevocable Trust: Offers possible estate tax advantages and asset protection but limits your ability to make changes once established.
3. Consider Business Succession Planning
If you’re an entrepreneur or have a side hustle that’s become a thriving business, take time to plan how it will continue without you. Business succession planning identifies who will take over the operations, how the leadership transition will work, and ensures taxes and liabilities are handled correctly. This step is critical to protecting not just your family’s immediate income but also the long-term viability of your enterprise.
Pro Tip: Draft a formal business succession document that coordinates with your overall estate plan. Aligning both ensures there are no legal gaps or tax surprises, especially important under IRS Code § 6166, which addresses extensions for payment of estate tax on closely held businesses.
4. Stay Current with Tax Regulations
One of the best ways to protect your legacy is to plan around taxes. The Internal Revenue Service provides guidance on gift taxes, estate taxes, and ways to structure trusts for better outcomes. Keep an eye on changes in federal and state estate tax thresholds. For instance, IRS Code § 2503 outlines annual gift tax exclusions. By “gifting” assets gradually, you can reduce your taxable estate while helping loved ones during your lifetime.
Pro Tip: Small, regular gifts can add up significantly for your heirs while potentially lowering your total estate tax bill. Always consult a tax professional or IRS Enrolled Agent if you’re unsure about regulations.
5. Make It Official and Keep It Updated
Having the documents is one thing; ensuring they are legally binding is another. Work with legal experts—like our team at L.A. Mason & Associates—who are well-versed in state-specific estate laws and who will ensure your plan stands up to scrutiny.
Pro Tip:
- Verify that all your documents (will, power of attorney, healthcare directive, trust agreements, business succession plans) are signed, witnessed, and notarized according to your state’s requirements.
- Store them in a safe, yet accessible location. Let a trusted family member or advisor know where they are.
Empower Your Future Today
Estate planning isn’t just for wealthy people with vast fortunes—it’s about safeguarding what you have and ensuring the people and causes you care about are taken care of. Whether you’re supporting your children’s college dreams, your favorite community organization, or your next entrepreneurial venture, creating an estate plan is a vital piece of the puzzle.
Next Steps: Take Action Now
- Download Our Free Estate Planning Ebook: Get expert insights, checklists, and templates to kickstart your estate planning journey.
- Sign Up for the #30DayLegacy Challenge: In just 30 days, we’ll guide you step by step toward creating your personalized estate plan. It’s time to secure your family’s future!
Stay Woke!
