Everyone seems to be talking about inflation these days. While some experts believe our current inflation trends are temporary due to pent-up pandemic demand, others worry we are on a trajectory of inflation that could last years. We’ll have to wait and see which economists were right, but—for now–it’s important to safeguard your estate against inflation.
It is becoming increasingly important to plan your estate as the cost of living increases every year in order to ensure that your loved ones are provided for after your death. That said, inflation affects more than just the housing market. Inflation directly impacts gas prices, grocery prices, and all other goods and services. Understanding inflation’s impact on our finances can help us protect our estate against its impacts.
Inflation is a major factor when it comes to estate planning because it affects how much money you will have available and what kind of lifestyle your family can expect if something happens to you. As a result of inflation, your estate plan is adversely affected when your assets are growing at a slower rate, which devalues your estate.
In the event of a person’s death, an estate plan aims to provide its beneficiaries with access to their assets without the need for a court-supervised probate. It is possible to protect yourself and your family from the financial effects of inflation and make sure they are taken care of no matter what life throws at them by putting an estate plan in place.
Four reasons why having an estate plan is increasingly important in the face of inflation
Preserving Wealth: Inflation can erode the value of money over time. By having an estate plan, individuals can take steps to preserve their wealth and ensure its efficient transfer to their beneficiaries. Estate planning tools like trusts, gifting strategies, and tax planning can help protect assets from inflationary pressures.
Healthcare and Long-Term Care: As healthcare costs rise, having an estate plan becomes crucial for addressing potential medical expenses. Advanced healthcare directives, powers of attorney, and long-term care provisions can help ensure that individuals’ medical and financial wishes are respected during times of increasing costs.
Legacy and Beneficiary Protection: Estate planning allows individuals to define how their assets should be distributed among their beneficiaries. It enables them to consider the potential impact of inflation and establish strategies to safeguard the financial well-being of their loved ones.
Tax Efficiency: Estate planning can help minimize the impact of estate and inheritance taxes, allowing individuals to pass on a larger portion of their assets to their heirs. This becomes particularly important when considering the potential effects of inflation on the value of the estate.
Inflation affects both young and elderly Americans differently. While young Americans may face challenges in managing living costs and debt, the elderly may experience difficulties with fixed incomes and healthcare expenses. Inflation underscores the importance of estate planning, which helps individuals preserve wealth, address healthcare costs, protect beneficiaries, and optimize tax efficiency in an inflationary environment.
Inflation is on the rise; it’s time to act.
A trusted estate planning attorney at Sandoval Legacy Group can help you review your goals and adjust your plans at this crucial time. A financial planner can also run scenarios with even higher inflation to stress test your estate plan. You can ensure that your family’s best interests are protected by educating yourself about your options.
Contact Us for Personalized Estate Planning in Southern California
We know discussing end-of-life plans can be difficult, but we approach this delicate conversation with respect and dignity. Our estate planning services cover all areas of elder law and probate based on your specific financial & health situation. If you have questions or concerns regarding your estate plan, probate, special needs planning, or elder law, attorney Dennis M. Sandoval and the Sandoval Legacy Group team are ready to assist you.
Southern California’s Premier Estate Planning Law Firm
With thirty-plus years of experience as an estate planning law firm in Southern California, you will have the most experienced legal minds to guide you. The trusted estate planning lawyers at the Sandoval Legacy Group, a division of Holstrom Block & Parke, A Professional Law Corporation, have offices located throughout Southern California in Orange, Riverside, San Diego, San Bernardino, and Los Angeles counties. If you have questions or concerns regarding your estate plan, special needs planning, elder law, conservatorships, advanced tax planning, or probate, contact us or give us a call at (888) 502-2881 to schedule a complimentary consultation.