As we age, or as the people we know and love age, it becomes more and more important to think of transition planning. Who will inherit the business? Who will get the house? How will we divide the assets of a business, a farm, or even a foreign-based corporation? The time to plan for your estate or trust is now, and it is one of the best gifts you can give your loved ones.
Contrariwise, if you are caring for an aging parent who is still mentally competent, you can gently nudge them to consider doing some financial planning. There are many, many things that can be done with trusts or estates. Indeed, in San Francisco the ownership of a home or property in and of itself can propel people into the need for some complicated trust and estate planning strategies; all the more so if you own a California-based business.
First some nomenclature.
A trust is a fiduciary arrangement that allows a trustee (a third party) to hold assets on behalf of a beneficiary or beneficiaries. Most people create “revocable trusts” which are often referred to as “living wills”
Estates are simply assets: the net worth of a person’s assets all combined, and joined together.
Trust and Estate Planning
So at your next Bay Area party, when people talk about trusts and estate planning, please realize they are really talking about all of this together. Now here’s the next step. Generally, you need a lawyer to set up the trust and estates, but it is a very wise thing to work with a CPA or accounting firm. You need someone very smart about the law, and you need someone very smart about taxes.
We work with many San Francisco law firms, and can probably work with yours. But we also can be the starting point if you are considering a trust or estate planning, and then we can help refer you to the necessary legal help.
So trust and estate planning is really where financial life meets legal life. Why you need a CPA is that the financial / tax aspects of trusts and estates is not only very complicated but can be very advantageous to your tax planning. If you have significant assets in a house or business or stock options, reach out to us to discuss trust and estate planning issues. It’s never too late to learn, and it’s never too late to give this gift of serenity to your heirs.