{"id":15192,"date":"2023-05-11T12:45:39","date_gmt":"2023-05-11T17:45:39","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=15192"},"modified":"2023-05-11T15:29:11","modified_gmt":"2023-05-11T20:29:11","slug":"estate-planning-with-johnson-wealth-and-income-management","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/estate-planning-with-johnson-wealth-and-income-management","title":{"rendered":"Estate Planning with Johnson Wealth and Income Management"},"content":{"rendered":"

Estate planning is an essential part of wealth management, and it involves organizing and distributing your assets after death. While it may not be the most compelling topic, it’s crucial to get organized now to help ensure that loved ones are cared for after you pass away.<\/b><\/p>\n

In this blog, we\u2019ll delve into the importance of estate planning<\/a> and how Johnson Wealth and Income Management can assist you in creating a comprehensive estate plan. So, buckle up and get ready to learn everything you need to know about creating an estate plan and how it can provide peace of mind knowing your loved ones will be financially secure when you’re no longer around to support them.<\/span><\/p>\n

What is Estate Planning?<\/h3>\n

Effective estate planning can help you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and help ensure that they\u2019re carried out \u2013 even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.<\/span><\/p>\n

The Importance of Estate Planning<\/b><\/h3>\n

Estate planning should be an essential step in everyone’s overall retirement plan<\/a>. Besides making sure your assets get to the people you want, planning your estate can help minimize income, gift, and estate taxes, too. <\/span><\/span>\u00a0Despite being a crucial element of a comprehensive financial plan, many Americans overlook estate planning, some due to the recent economic turmoil faced by the U.S. and the world. <\/span>A recent survey showed<\/a> that 1 out of 4 Americans recognized the need for estate planning due to inflation<\/a><\/span>, yet only 34% had taken the necessary steps to create one. <\/span><\/p>\n

Another reason why Americans shy away from creating an estate plan is they think it’s just for the rich. However, “Estate” refers to ANY asset\/possession, from\u00a0your car to your wedding ring.<\/span><\/p>\n

Control Over Asset Distribution<\/b><\/h3>\n

One of the most important grounds for estate planning is having control over your assets’ distribution. By creating an estate plan, you can help ensure your assets are distributed according to your wishes. You may want to leave certain assets to specific family members, friends, or charities. You can also set conditions on how and when your inheritance will be.\u00a0<\/span><\/p>\n

Without a proper estate plan, your assets may be distributed according to state laws, which may not align with your wishes. Control over asset distribution is crucial if you have grandchildren or family members with special needs who may require ongoing support, such as living with a disability.\u00a0<\/span><\/p>\n

Minimizing Taxes<\/b><\/h3>\n

Estate planning is a good resource for helping to minimize taxes<\/a> and help ensure that your heirs receive the maximum amount of your assets. One of the most significant tax implications of estate planning is the estate tax. Estate Taxes are levied on the transfer of property at death. Without an estate plan, your estate could be subject to federal estate taxes of up to 40%,<\/a> significantly reducing what your heirs receive.<\/span><\/p>\n

However, with proper estate planning, you can help minimize your tax burden and ensure that your assets are distributed according to your wishes. Some strategies include gifting investments during your lifetime, setting up trusts, and taking advantage of tax exemptions. Setting up trusts<\/a> can help minimize estate taxes by removing assets from your estate while helping you to maintain control over them.<\/span><\/p>\n

In addition to trusts, taking advantage of tax exemptions and deductions can help reduce your overall tax burden. For example, you can deduct charitable contributions<\/a> from your estate taxes. You can also take advantage of the estate tax exemption<\/a>, which allows you to gift $17,000 per donee.<\/span><\/p>\n

Annual Exclusion per Donee for Year of Gift<\/h3>\n\n\n\n\n\n\n\n\n\n
Year of Gift<\/th>\nAnnual Exclusion per Donee<\/th>\n<\/tr>\n<\/thead>\n
2011 through 2012<\/td>\n$13,000<\/td>\n<\/tr>\n
2013 through 2017<\/td>\n$14,000<\/td>\n<\/tr>\n
2018 through 2021<\/td>\n$15,000<\/td>\n<\/tr>\n
2022<\/td>\n$16,000<\/td>\n<\/tr>\n
2023<\/td>\n$17,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: Internation Revenue Service<\/em><\/a><\/p>\n

Avoiding Probate<\/b><\/h3>\n
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Probate is the legal process of distributing a deceased person’s assets, which can be lengthy and expensive. Without proper planning, your assets could be tied up in probate for months or years, leaving your loved ones in a difficult financial situation. However, with proper estate planning, you can help avoid probate and ensure your assets are distributed quickly and efficiently.<\/span><\/p>\n

Strategies to help avoid probate include setting up trusts, naming beneficiaries, and jointly owning a property with the right of survivorship. Working with a fiduciary advisor can create a plan that helps minimize probate. Estate planning is a framework to help ensure your loved ones are cared for after you’re gone. Working with a fiduciary advisor is essential to ensure all your needs are met.\u00a0<\/span><\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

What Happens if I Don’t Have an Estate Plan?<\/h3>\n

Without a proper estate plan in place, your assets could be tied up in probate for months or years, leaving your loved ones in a difficult financial situation.<\/span><\/p>\n

That’s why at Johnson Wealth and Income Management, we strongly encourage you to prioritize estate planning to help ensure that your wishes are carried out after you are no longer able to do so and help ensure your loved ones are taken care of. Start your estate plan today to help avoid the following in the future:<\/span><\/p>\n

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  1. Your family going to court.<\/strong> If you don\u2019t have a plan, or if you only have a will (yes, even with a will), you\u2019re forcing your family to go through probate upon your death.<\/li>\n
  2. Having no control over who inherits your assets.<\/strong> If you die without a plan, the court will decide who inherits your assets, and this can lead to all sorts of issues. Who is entitled to your property is determined by our state\u2019s intestate succession laws, which hinge largely upon whether you are married and if you have children.<\/li>\n
  3. Having no control over your medical, financial, or legal decisions in the event of your incapacity.<\/strong> Most people incorrectly assume estate planning only comes into play when they die. Although planning for your eventual death is a big part of the process, it\u2019s just as important\u2014if not more so\u2014to plan for your potential incapacity due to accident or illness.<\/li>\n<\/ol>\n

    Working With a Fiduciary<\/strong><\/h3>\n

    By working with a Fiduciary advisor<\/a> experienced in estate planning, you can help further identify tax-efficient strategies to help minimize your tax burden and help ensure that your assets are distributed according to your wishes.<\/span><\/p>\n

    Johnson Wealth and Income Management is a financial advisory firm with extensive experience in estate planning. Our knowledgeable team has helped countless clients in Iowa and Southern Minnesota create comprehensive estate plans that help provide peace of mind for them and their families, no matter what life may bring. We offer a range of services<\/a> to help you with your estate planning needs, including:<\/span><\/p>\n