5 Non-Tax Reasons for Estate Planning

As the Unified Gift and Estate exemption is now $5.49 million per person, is there still a need for a living trust or estate plan?  There are many reasons for a comprehensive estate plan other than to save estate taxes.  Below are just five of these reasons how a good estate plan can be beneficial and help achieve goals.

1) Avoid probate

In California probate is a process where a will must be proven to the court, and it is notoriously costly and lengthy.  In addition to the administrative hassle, probate can also have fees up to 4% of the estate.  However, with a trust plan in place probate, with its fees and headaches, can be avoided.

 2) Leave assets to your beneficiaries when you want and how you want 

If the beneficiary is a minor, all 50 states have laws that require a guardian or conservator to be appointed to oversee the minor’s needs and finances until the minor becomes a legal adult. You can prevent family discord and costly legal expenses by setting up an estate plan to designate a guardian and/or trustee for your minor beneficiaries.

Sometimes, there are concerns that the children are not prudent at managing money or have an overbearing spouse or partner may squander the beneficiaries’ inheritance or take it in a divorce. A carefully crafted estate plan can protect the beneficiary from their own bad decisions as well as those of others.  Furthermore, there are many blended families with children from previous relationships.  With proper planning, you can avoid the risk beneficiaries will be disinherited if the surviving spouse has a change of heart.

Overall, appropriate estate plans can meet many different goals and desires for each unique situation.

 3) Protecting Assets from Unforeseen Creditors

Asset protection planning is another factor to consider a comprehensive estate plan. Once it is known or even just suspected that a lawsuit is on the horizon, it’s too late to put a plan in place to protect your assets. On the other hand, a comprehensive estate plan that couples with a sound financial plan will protect assets for the benefit of both the owners during their lifetime and their beneficiaries after their death.

4) Business succession planning

For business owners, especially for businesses with multiple partners, creating and implementing a sound succession plan will provide several benefits to owners and partners if one of the partners/owners is deceased:  It eliminates the need for valuation upon death because the parties can agree upon a price for the partner’s shares of business beforehand.  The life insurance policy proceeds will be immediately available to pay for the deceased partner’s share of the business, with no liquidity or time constraints. This effectively prevents the possibility of an external takeover due to insufficient cash flow or the need to sell business or other assets to cover the cost of the deceased’s interest.  Overall, a good succession plan can make for an easy transition during difficult times.

5) Incapacitation

As part of a good estate plan legal documents are executed to choose a decision maker if the person isn’t able to choose for themselves.  This can give people great comfort that if the worst were ever to happen that they would have someone they trust making decisions for them and things would be done according to their wishes.

Every case is unique and must be thoroughly discussed to develop a plan that meets the desired goals and consequences.   Contact us at Hone Maxwell LLP if you have any questions or would like to review your situation.


Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

Latest Post


12 Marina View #23-01
Asia Square Tower 2
Singapore 018961
+65 8648 3995


3465 Camino Del Rio South, Suite 400
San Diego, CA 92108


Centro Corporativo Dayco
Blvd. General Gustavo Salinas #11050
Suite 602, Col. Aviacion
22014 Tijuana, B.C., Mexico
+52 (664) 504 6415

Entering the U.S. Business Market

Download Our Free Guide

Foreign investors: Learn about options for opening a business and tax compliance in the U.S.