Houser Firm

Consider both estate and financial planning to preserve wealth

On Behalf of | Sep 28, 2023 | Estate Planning

When you have worked hard and built considerable wealth, you want to do all you can to protect your money for the next generation. Like many, you may believe a sound financial plan is all you need to safeguard your assets.

It is true that financial planning plays a critical role in wealth preservation during your lifetime, but estate planning is just as vital. When done correctly, these two disciplines work concurrently to help you reach your financial and end-of-life goals.

How do they complement one another?

Financial planning focuses on helping you achieve your economic goals, such as saving for retirement, buying a home and paying for your children’s education. Estate planning allows you to distribute your assets among your loved ones after you die, but it can also strengthen your asset preservation strategies.

For example, complementary estate and financial planning can protect your wealth from creditors and lawsuits. Financial planning helps you identify and mitigate risks to your assets, such as by purchasing adequate insurance. With estate planning, you can preserve your assets by transferring them to a trust or other legal entity, keeping them safe from other interested parties.

Can tax planning also preserve assets?

Yes, tax planning is crucial to wealth preservation, and it is something you can address when you create your estate plan. Planning for taxes can help you utilize the annual gift tax exclusion to ensure the wealth you pass on does not incur steep tax penalties.

What else should you know?

Estate laws vary from region to region, so you need to know how it all works in Texas. You can learn about these laws by studying, but it is also wise to have legal guidance to ensure you understand the legal requirements for your estate plan.