Estate planning is essential even if you don’t have a lot of wealth or are early in family life

Oftentimes, people tend to tune out when they hear the term “estate planning,” because they assume it’s only for the wealthiest of the wealthy.

That’s easy to do when there are cases involving grantor retained annuity trusts (GRATs), where a misstep in planning can result in outrageous penalties, such as the $736 million the IRS is seeking from a wealthy Tennessee couple.

Forgetting that the same principles apply at lower financial brackets can be costly, according to Matt Dages, founder and CEO of Bright Wealth Management.

“Estate planning, though, is really relevant whether you have $500,000, $5 million, $50 million,” Dages said on the Bright Wealth Management Show. “And for most families, the federal estate tax is not the primary issue. It’s going to be (about) who controls my assets if something happens to me?”

Estate planning is about more than just wealth transfer

Shoring up an estate plan can bring individuals of any income level some added peace of mind, answering questions such as:

• Who receives my assets when I die?
• Will my family be stuck in probate?
• Will they be stuck paying unnecessary fees to lawyers?
• Will my estate documents be followed?
• What will my tax bill be when I retire?

“Estate planning isn’t just about controlling assets after death,” Dages said. “It’s also about maintaining control while you’re alive and having the right people be able to act during your lifetime.”

Dages said the planning should not just be for older people either. The sooner it can be in place, the better, especially if you have children.

“You should probably have a trust or a will or powers of attorney, making sure everything is up to date,” Dages said. “You don’t want to leave anyone empty-handed.

“Even if you don’t think you have enough stuff … you all have stuff. We have bank accounts, we have retirement accounts, we have cars, we have homes. … So let’s make sure that you maintain control of your stuff and all of your things and that it goes to the right person.”

Avoiding the probate process

No family wants to get caught up in the probate process while dealing with a close death, especially because of the time and fees it can drain.

“And then you got to fight with potentially family members and friends and loved ones over, hey, the money and the assets need to be divided in a certain way that we didn’t have any intention and we’re trying to pick up the pieces,” Dages said. “So let’s have an estate plan well in place ahead of any life event.”

To build a personalized financial roadmap that ensures your assets go where you intend without creating headaches, you can schedule a complimentary portfolio review with Dages and his team at Bright Wealth Management by visiting brightwm.com.

The Bright Wealth Management Show with Matt Dages airs Saturdays from 1 p.m. to 2 p.m. and Sundays from 3 p.m. to 4 p.m. on KTAR News 92.3 FM. 

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