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Middle-Class Estate Planning
Estate Planning


The estimated reading time for this post is 173 seconds

Middle-class estate planning is essential because estate planning is more than just the death tax. So, should the middle-class troubles itself with estate planning?  The short answer is yes.

Middle-income earners do not have to trouble themselves with Minority Interest Discount, Generation-Skipping Transfer (GST) Tax, or Estate tax (death tax); however, estate planning is as crucial for the middle class as it is for the uber-rich.  Property titling, probate, and incapacity planning are all parts of the estate planning that affect almost all socioeconomic classes. Below is a list of reasons the middle class should care about estate planning and one bonus reason they should not:

Property Titling

Between joint tenancy with right of survivorship (JTWROS) and tenancy by the entirety, the proper titling of your properties can save you lots of money and headaches. It would be best if you always titled your properties based on long-term situations. Don’t retitle your properties tenancy by the entirety one week after you met someone and married him in Las Vegas.  Sole ownership, tenancy in common, and trust ownership are other ways you can title your properties.

Avoiding/Reducing Probate Costs  

If your properties are not appropriately titled, and you retain control over the disposition of the interest at death, and you have a trust in which you are both grantor and beneficiary, your estate will go through probate. Keep in mind, although having a will might facilitate and expedite the probate process, it will not avoid it. Probate can be lengthy and costly.  The best way to prevent and reduce the cost is to draft relevant estate planning documents and title your properties appropriately.

Estate Planning Documents

  • Powers of Attorney–authorizes a person to act on your behalf 
  • Advance Medical Directives–spell out the types of medical treatments and procedures you would prefer if you become unconscious or incompetent or both.
  • Wills-spell out how the properties you own get disposed of after your death

Those estate planning documents are relevant to all socioeconomic classes.

Buy-Sell Agreement

This one is for small business owners and is widely overlooked on the estate planning checklist. If something happens to you, what will happen to your business, or partnership, or both?  A Buy-Sell Agreement will spell out how your business interest will get disposed in case of retirement, disability, or death.  A great estate professional can help draft a business succession plan and provide advice on how to fund-usual through life insurance

THE one reason the middle class should not care about estate planning-Death Tax

The median net worth of the average American household is $97,300, according to a Federal Reserve’s Bulletin. The ordinary, aka the mean, is about 8x, but, of course, is skewed by the likes of Jeff Bezos, Bill Gates, and Warren Buffet.  Because of credits, annual gifts exemptions, and marital and charitable deductions, you can pass close to $11.5 million on to your wife or heirs without any estate tax. Matter of fact, according to the Joint Committee on Taxation, 99.8 percent of estates owe no estate tax at all.

 A funded revocable trust, proper titling of properties, and other estate planning documents are relevant for most socioeconomic class.  Estate planning is more than just passing wealth on to your heirs. Estate planning is an essential part of holistic financial planning that can help arrange your middle-class life, pass properties to heirs with no hassle, and keep making life decisions even after you become unconscious or incompetent or both.


Senior Accounting & Finance Professional|Lifehacker|Amateur Oenophile

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