Investment advisory services offered through Sharma Associates, Inc.
Securities offered through Resource Horizon Group, L.L.C., Member FINRA,  SIPC
1350 Church Street Extension 3rd. Floor, Marietta, GA Phone: 770-319-1970
Sharma Associates, Inc. and Resource Horizons Group, L.L.C. are not affiliated.

What is Estate Planning?

We all work hard to create wealth and build up our assets, - Now we want to be sure that our property / assets / wealth will go to our heirs (next generation) or any other individual or organization to benefit from our assets.  We must find ways to minimize not only estate taxes, but also to minimize tax consequences to our heirs. Gift taxes may also come into play. This basically is Estate Planning.

Basic documents for estate planning:

1. Will or pour over will.
2. Regular or springing power of attorney.
3. Advance medical directive or Living will.
4. Revocable (living) trust.
5. Irrevocable life insurance trust (ILIT)

How a family transfers its wealth can be one of the determining factors in legacy to children, grandchildren and future generations, as well as to society. While estate-planning process can be quite technical in nature with emphasis on the transfer of assets, at its core it is fundamentally about the transfer of the values and priorities of those who created the wealth.

Generally speaking, individuals and families who are planning for the transfer of their wealth will want to focus on two broad areas:

1. What tools and techniques will minimize estate and income taxes so that one can transfer the maximum amount of wealth to heirs, especially in light of ever changing estate tax laws
2. What emotional issues and personal values matter to me? How can I convey these so that my children or grandchildren have strong work ethics, receive joy in their pursuits and have healthy self-esteem and life-style?

Wealth Transfer tools and Techniques

• Bypass Trust
• Dynasty Trust
• Qualified Personal Residence Trust
• Charitable Lead Trust
• Wealth Replacement Trust and Charitable Remainder Trust.

Factors to Consider when creating trusts:

A consciously structured trust can help children learn both social values and management skills. According to the experts at The Inheritance Project, the three factors that parents may want to balance in the estate planning process to ensure healthy and heirs are:

1. Children's need for autonomy: Trusts can range in flexibility from irrevocable generation skipping trust agreements, in which heirs have no control over the assets, to certain kind of simple trusts that allow heirs to use the funds as they wish.
2. Protection of estate: Tax avoidance is the main reason why people create trusts. But the trust structure that gives the most tax-savings may not necessarily promote the emotional well being of heirs.
3. Children's need for reasonable protection: The incentive trust is gaining in popularity. It allows parents to protect their heirs from some of the negative consequences of inheriting such as being unmotivated to work or to achieve certain levels of education. The beneficiaries receive the money, but only under certain circumstances.

It is important to work closely with an advisor, legal counsel to determine which structure makes the most sense for everyone involved.

For more information, please feel free to contact me, Hans Sharma, MBA, CFP