A well-informed plan can make a big difference in what is left for your loved ones. Although estate planning can be a complex task, working with the right team which may include an attorney or tax advisor can make this much easier to navigate.
The attorney’s role will include guiding you through the creation of fundamental estate planning documents. These may include a will, health care proxy, and durable power of attorney. The tax advisor can help you with any associated tax issues.
A big part of maximizing what you leave behind is minimizing taxes. Federal taxes on gifts and estates can be among the highest assessed on any financial transaction. In addition, some states levy their own estate or inheritance taxes.
Both estate and gift taxes usually have exemption limits, meaning you can give up to a certain amount without incurring tax. Many people use the gift tax exemption to transfer assets while they are still living, as part of their strategy to maximize what their beneficiaries receive.
Estate and inheritance taxes usually are based on the value of the taxable estate and are paid before the assets are distributed to the beneficiaries.
Of course, you’ll make the decisions, but your advisory team can help you think through and understand the sometimes complex implications of each option.
You’ll want to be thoroughly informed on what actions you can take or plan now to make sure as little as possible is lost to taxes, court fees, and other expenses.
They will also help you communicate your wishes clearly, avoid mistakes, minimize taxes, and adjust your plans as time goes by or your circumstances change.
An attorney or tax advisor can be well worth the cost—significant savings can result from thorough, informed planning.
Without careful planning, taxes and the probate process can reduce the amount you leave to your beneficiaries. In recent years, estate and gift tax laws have been changing fairly frequently and its not easy keeping up with the latest.
Maximizing what you leave behind, don’t minimize it.
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