When it comes to your wealth, you have control over many financial decisions during your lifetime. But what happens when you’re no longer here?
At the end of the day, your money, and the rest of your financial legacy, will go to one of three places:
- The government – in the form of estate taxes and other transfer costs.
- Your heirs – family members, loved ones, or other beneficiaries of your choosing.
- The Community – a cause or organization you want to support.
The key question is: How does your plan meet your objectives?
Without proper planning, your wishes might not be honored, and a significant portion of your estate could go to taxes rather than your family or chosen causes. Fortunately, with the right strategies, you can take control of your legacy.
At C3 Financial Partners, we collaborate with clients and their advisors to ensure they have clarity on their goals and objectives, confidence in the decisions they make and coordination with their team to enact their plan.
How to Ensure Your Wealth Goes Where You Want It
1. A Clear and Updated Estate Plan
A well-structured estate plan is the foundation of ensuring your assets are distributed according to your wishes. This includes:
- A will that outlines your intended beneficiaries and distributions.
- Trusts that can help protect assets, provide control over distributions, and reduce estate taxes.
- Beneficiary designations on retirement accounts and life insurance policies that are regularly reviewed and updated.
Without an estate plan, the government may step in to distribute your assets through probate, which can be time-consuming, costly, and might not align with your objectives.
2. Tax Planning to Reduce the Government’s Share
Estate taxes can take a significant portion of your wealth, depending on the size of your estate and your state of residence. Some key planning strategies to minimize taxes include:
- Gifting assets during your lifetime to reduce the size of your taxable estate.
- Establishing trusts to shield assets from unnecessary taxation.
- Charitable planning strategies that allow you to support causes you care about while also reducing estate and income taxes.
The goal is to ensure that your wealth is used according to your intentions, rather than being unnecessarily lost to taxation.
3. Incorporating Charitable Giving
If philanthropy is important to you, planning ahead can allow you to leave a meaningful legacy while also receiving potential tax benefits. Options include:
- Naming a community organization as a beneficiary in your estate plan.
- Establishing a donor-advised fund (DAF) to manage your charitable giving over time.
- Creating a charitable trust that can provide income for heirs while benefiting a nonprofit organization.
These strategies not only support the causes you care about but also help reduce estate taxes and maximize what you pass on to your heirs.
Ensuring Liquidity for Heirs
One of the biggest challenges in estate planning is ensuring your heirs have access to the liquidity they need to cover taxes, debts, and other expenses without having to sell valuable assets. This is where tools like life insurance can play an important role.
A properly structured life insurance policy can:
- Provide immediate liquidity to cover estate taxes and settlement costs.
- Help keep family businesses, real estate, or other valuable assets intact.
- Create an equalization for heirs when certain assets (like a business) are passed to one beneficiary but not others.
While life insurance is not the only solution, it is one of the most efficient ways to ensure your estate plan works as intended.
Your Legacy, Your Choice
At the end of the day, your wealth will go to your heirs, the community, or the government. How much goes to each is up to you. With the right planning, you can minimize taxes, protect your family, and support the causes that matter most to you.
If you haven’t reviewed your estate plan recently, now is the time. Making thoughtful decisions today ensures that your wealth is distributed according to your wishes – not the government’s.
Want to discuss the best strategies for your estate plan? Let’s start the conversation.
At C3 Financial Partners, our goal is to help clients achieve clarity in defining their estate planning objectives, confidence in knowing they are making informed decisions about their legacy, and coordination with their trusted advisors to design and execute a plan that aligns with their long-term goals.
The information presented here is for educational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation, or needs of individual investors. This material is not intended to provide, and should not be relied on, for tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated.
Securities offered through Valmark Securities, Inc. member FINRA, SIPC. Investment advisory products and services offered through Valmark Advisers, Inc., an SEC Registered Investment Advisor. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. C3 Financial Partners is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.
