Leave a Legacy: Practical Steps to Establish an Estate Plan

Estate planning can be a difficult topic to think about, but it is an essential component of your financial plan. With a solid estate plan, you can put measures in place that will help your wishes be executed after you are gone. Failing to create an estate plan now can leave your loved ones with lengthy, expensive legal processes, high taxes, or even familial disputes. At GDS Wealth Management, we work closely with our clients to help them create a plan that aims to preserve and manage their wealth for future generations, minimize estate taxes and other financial burdens, support philanthropic goals and causes, and offer peace of mind and family harmony. But rest assured; even if you do not have a financial adviser, there are still steps you can take today to set your loved ones up for future success.

Our first recommendation is always to ensure that you have a will in place. Your will functions as the cornerstone of your estate plan; in it, you will name an executor who will manage your estate after you pass away and outline how you wish for your assets to be distributed. To create a will, you will need to first list your assets. We recommend working with a financial adviser or other professional to confirm that your assets are properly accounted for. After listing your assets, designate beneficiaries. Your assets do not have to be divided equally. The division process is solely at your discretion.  

You will also need to appoint an executor – and, in some cases, a backup executor. This person will act on your behalf to handle your affairs. If, for example, you set up a trust for some of your beneficiaries, the executor will often help facilitate the trust. Finally, notarizing your will solidifies its credibility as a legal document. While we do advise working with an attorney to ensure your will is enforceable, these are all steps you can complete on your own, should you wish to do so.

Estate taxes can substantially reduce the amount of money your beneficiaries receive. To ensure they receive the maximum amount possible, consider taking advantage of some of the following tax strategies. In 2024, the annual gift tax exclusion is $18,000. This means that you can gift up to $18,000 tax-free this year to your beneficiaries. Distributing part of your wealth now allows your beneficiaries to receive it sooner and avoid paying taxes on it.

If you plan to leave some of your estate to charity, keep in mind that philanthropic contributions can reduce your estate’s taxable value. This is another helpful thing to note in your will; you can specifically name charities you would like to donate to and even indicate amounts. In consultation with an estate planning attorney or tax professional, you might also consider setting up a bypass trust, which can reduce estate taxes through spousal exemptions.  

We recommend discussing your plan with your loved ones now. These conversations might seem daunting or uncomfortable, but frank and honest discussions can help eliminate confusion or conflict. At the very least, we recommend that you make sure your loved ones, and especially your executor, know where to find your important documents, passwords, and account information.  

Estate planning is so much more than just dividing your assets. It is about providing security for your loved ones and ensuring your wishes are respected. With a strong estate plan in place, you will have the peace of mind that comes from the knowledge that your loved ones will be cared for. If you have any questions about estate planning, please contact our office. We offer a complimentary initial consultation and would love to meet with you to see if we are a good fit for your financial needs. You can reach our office at (469) 212-8072 or visit www.gdswealth.com.