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What Is a Legacy Plan and Why Is It Important?

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Legacy planning involves preparing how the creator of the plan will bequeath their assets and properties to their beneficiaries. Proper legacy planning will enable your beneficiaries to obtain maximum value from the assets and properties that you leave behind for them.

Here are some compelling reasons to partner with a law firm in Sonoma County to create a legacy plan.

Have Full Control Over Who Receives Your Assets

If a person passes away without designating their beneficiaries, their assets will get distributed according to the intestacy laws of the region where they resided. Their intended beneficiaries may only receive some of their assets. In a worst-case scenario, they may not get anything.

If a person passes away without creating a legacy plan, their family may fight over their estate, which could result in substantial costs surrounding their estate.

Effective Legacy Plans Help Reduce the Tax Burden on the Beneficiaries

Inheritance tax is a tax imposed by a state on a percentage of a deceased person’s estate value and the inheritor must pay this tax. An effective legacy plan will allow you to transfer your wealth to your beneficiaries with the lowest possible tax bill.

An estate may include hidden estates that do not appear in the balance sheet (such as life insurance, annuities, and trusts) but can increase the beneficiaries’ tax burden. By planning appropriately, you will determine the true value of different parts of your estate and minimize the impact of taxes on them.

Helps Avoid Family Messes

Creating a legacy plan is one of the most effective ways to avoid family disputes that may arise if a person passes away without designating who gets what. A legacy plan will also allow you to choose who will control your assets if you get physically or mentally incapacitated.

A Legacy Plan Will Help Ensure Your Wishes Are Carried Out

Whether you want to make arrangements for a child with a health problem or set up a trust for a beneficiary to ensure they do not inherit a lump sum, it makes sense to create a legacy plan. An effective legacy plan will help ensure your legacy gets distributed in line with your wishes.

Steps When Building a Legacy Plan

➢ Make a list of assets and liabilities

➢ Choose your beneficiaries and designate guardians

➢ Hire an attorney to prepare essential documents such as your will, guardianship, living will, and power of attorney

➢ Discuss your legacy plan with your family and close friends

➢ Review and reassess your plan regularly

Johnston Thomas Law  is a top-rated law firm in Sonoma CountyNo matter how complicated your estate, our attorneys will create a plan to meet your unique needs best. To consult with our team, call (707) 545-6542.  

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