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Bob Carlson: Legacy Planning Vs. Estate Planning, Part Two

In Bob Carlson's recent post on Investing Daily, he discussed the importance of looking at an estate plan from more than one angle. He recommended viewing it as more of a legacy plan, rather than a blueprint for giving away your assets after death.

Part one of this focus on estate planning touched on the issues of providing for one's own financial security and designating management of the estate. The second is especially important for small business owners, who likely managed the business themselves and must now attempt to transfer that oversight to another.

Today, the focus is on "protecting the estate" and accounting for estate tax.

3. Protecting Your Estate

Again, to use the small business example, assume that you are transferring management of the business you founded to a family member, current employee or close friend. In addition to determining who will replace you, you must also take into account any claims others might have against your assets.

For example, will creditors be able to seize part or all of your business? Other issues to consider are lawsuits against you, as well as any family members who you may wish to leave out of the business. An experienced estate planning attorney will be able to advise you on the best way to protect your estate according to the laws of your state.

4. Planning for Estate Taxes

If it can be taxed, it will be. While the federal government tossed Americans a bone this year by forgetting to renew the estate tax, state taxes still apply. Plus, next year the federal estate tax will be back and, supposedly, higher than ever.

If you have a large estate with many assets, you have the opportunity to transfer some of those assets without incurring a tax - or incurring a much lower one. Again, an experienced estate planning attorney should be able to help you do this as per the laws in your state.

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