Estate Planning May Assist Retail Investors

Retail investors who have investable assets amounting to less than $100,000 often overlook an important aspect of financial planning. As a recent article explains, this part of financial planning is creating an estate plan.

According to attorney Michael Brennan, “The mistake these folks are making is assuming that an estate must consist of millions of dollars. But, the truth is that nearly everyone has an ‘estate’ for purposes of estate planning.” According to Brennan, pieces of an estate include personal residences, insurance policies, various accounts, and personal possessions. Often, these assets can add up to a sizable estate. Estate planning is further important to high net worth investors, because such investors are more sensitive to the changing tax and estate laws than the average American.

The many benefits of creating an estate plan include ensuring that assets are divided according to the owner’s wishes, as well as reducing the eventual estate tax burden. Although there are many benefits to estate planning, the article reports that 56 percent of retail investors die without any estate plan in place. In comparison, of investors with $5 million or more in investible assets, only 6% die without an estate plan.