Estate Planning in Threes, Fours, and Fives

by | Jun 29, 2022 | advisors, clients' legal issues, estate and tax planning, Estate Planning, estate planning documents

You might think of estate planning in terms of a three-legged stool, involving three basic considerations:

  1. your heirs’ needs
  2. your own financial situation and future
  3. taxes

Tim Cesnick, author of Winning the Estate Planning Game, writes that there are four basic components to estate planning:

1. structure – legal documents, including wills, trusts, powers of attorney, and healthcare authorizations
2. wealth preservation – keeping one’s wealth away from creditors, unnecessary expenses, spendthrift heirs, and taxes
3. distribution of assets – selecting heirs
4. personal wishes – specifying funeral details, distribution of personal items, and care of pets

At Geyer Law, we know that for many of our clients, there’s a fifth element – providing for employees and business partners,

Three taxes in Indiana which may impact a client’s estate:

  1. Income tax – 3.23% (No tax on Social Security payments)
  2. Property tax (effective rate of .81%)
  3. Sales tax – 7%

Indiana does not have an inheritance tax, having eliminated this form of taxation in 2013. If an Indiana resident inherits funds from a decedent who was a resident of a state where inheritance tax is still in place, taxes may be due.

Clients should keep in mind that advisors also play a role in their estates and their family members should have contact information for each of these advisors. The five advisors who have key roles in your estate and financial planning include:

  1. estate planning attorney
  2. accountant
  3. financial planner
  4. insurance agent
  5. banker

As you review and update your estate plan, think in terms of threes, fours, and fives!

– by Rebecca W. Geyer