Estate planning is one of the most significant gestures of love and responsibility we can give to the loved ones who will continue after us. It’s a way of taking care of things, tying up loose ends so that the burden doesn’t fall on others while they’re grieving. And while estate planning is about much more than material wealth — there’s more to a legacy than that — it’s the material stuff that can often be the most difficult to handle after someone’s gone.
People often turn to financial services companies to help them prepare a wealth transfer strategy. That’s the best way to ensure that any legal entanglements are dealt with proactively so that there’s minimal loss of wealth and other resources when the transfer occurs.
“A well-thought-out wealth transfer strategy is more than just allocation of assets,” says Galen Bargerstock. “It protects against troubles with the probate court and generally prevents the government from becoming the biggest beneficiary of the estate due to taxes.”
Bargerstock is the President of GCES, an Indiana, Pennsylvania-based financial services company. With over a decade of experience, GCES has helped numerous people with crucial financial tasks such as setting up life insurance, income planning, and planning for retirement. GCES also offers wealth transfer planning services.
“There’s no such thing as two identical estates, so every wealth transfer strategy has to be made to fit the circumstances the client is in,” Bargerstock explains. “We take a personalized approach that considers all the intricacies of the family dynamics, the nature of the assets, and any long-term wishes the client has.”
Creating a will or a trust — or both — is at the core of estate planning. These documents govern asset distribution, outlining who will inherit what under which circumstances. When avoiding probate, having a well-structured will or trust is the best defense against getting drawn into the lengthy, tedious process.
“Trusts are great financial tools for people concerned with wealth management because of their flexibility and specificity,” Bargerstock explains. “Trusts can be established to provide financial support over time instead of a lump sum, for example. There are also specialized types of trusts useful for tax optimization.”
Taxes are the key word when planning one’s financial legacy. There are various strategies that GCES uses to minimize an estate’s exposure to taxes. For example, the company might advise its clients to combine the annual gift tax exclusion and the lifetime estate and gift tax exemption, ensuring enough money is transferred over time while still not losing the lifetime exemption.
“If you own a business, it too becomes a part of the estate transfer,” says Bargerstock. “Again, it’s important to evaluate and analyze the business and determine the line of succession to minimize the exposure to taxes.”
An estate plan will also include things that don’t directly involve wealth but are vital for preserving the person’s wishes. Giving someone durable power of attorney and designating a health proxy is critical to ensure that the financial and health preferences are respected in case the person becomes incapacitated.
“Estate transfer offers guidance, direction, and a sense of security to our loved ones,” Bargerstock concludes. “And even though it often revolves around material assets, the care that goes into it is an important part of inheritance — and it’s not taxable.”