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Estate planning, though a difficult topic to broach with loved ones, is a critical part of managing wealth. Working with a financial advisor, you can create a Legacy strategy that will help to ensure a framework that you can uphold through your wealth transition. Here are ways to help you get started, including aligning your plan with your values, deciding what it will consist of and considering tax implications when deciding how your wealth will be shared.

Align your legacy strategy with your values

Building wealth is a priority for many people, and estate planning is a critical component of managing that wealth by ensuring your money is passed on in ways that align with your values. The thought of discussing this topic often leads to uneasiness, but having an open dialogue with family and potential heirs can help ensure they are prepared to make the most of their inheritances.

Work with an advisor to build your strategy

Legacy planning is an integral part of the UBS Wealth Way framework.1 Working with your Advisor can help you sort out how much you’ll need to fund your lifetime goals (the Liquidity and Longevity strategies) and will allow you to identify which assets can be safely earmarked for the Legacy strategy, which is devoted to improving the lives of others.

You can begin working on your Legacy strategy by answering these questions:

  • How much do I want to give?
  • What do I want my wealth to accomplish?
  • How do I pass along as much as possible to my loved ones rather than the IRS?
  • When should I make the gifts?
  • How transparent should I be with my heirs?

Next, you’ll want to decide what your estate plan will consist of. A foundational estate plan will generally consist of a will, revocable living trust, financial durable power of attorney and medical directive. Each state has laws that govern the drafting, interpretation and validity of these documents.

Third, you’ll want to decide how your wealth will be shared. Tax considerations are central to making this decision, and there are several planning options when it comes to tax-efficient transfers to desired beneficiaries. The simplest form, whether made during life or at death, is an outright gift. However, simplicity doesn’t necessarily provide tax efficiency or creditor protection. An alternative approach often involves making gifts via a trust.

Create a framework and revisit it regularly

Taking these steps can be well worth the effort because estate planning offers a substantial opportunity to enhance after-tax wealth for your family. Work with your financial advisor to coordinate your estate planning, tax and investment strategies as a comprehensive framework. You will likely need to revisit them at least every few years to evaluate whether legal changes—or new circumstances for you or your family—merit a change.

Want to know more? Find out more about UBS Wealth Way.

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