Estate planning is a touchy subject. But it’s critical to have a comprehensive estate plan. The plan ensures your loved ones receive their inheritance according to your will. With an estate plan, your spouse and children will have financial stability and support. You will minimize taxes on your inheritance and ensure a smooth transfer of your property to the beneficiaries. Planning your estate right is critical. Doing so will ensure you have peace of mind.
Below are 4 tips to help you plan your estate right!
1. You Should Work With An Attorney Or Tax Advisor
Although working on your estate plan might seem like a daunting task, employing the services of an attorney or tax expert will make the endeavor easier. The attorney will help you in creating all the estate planning documents. Some of these documents include:
- A will
- Health care proxy
- A durable power of attorney
- Living trust
Although you will be in the driver’s seat all along, the attorney or tax advisor comes in handy by offering advice. They will also help you understand some of the more complex processes. The tax advisor will help you understand the tax implication of each option. Hiring the services of an attorney and tax expert will enable you to get your estate planning right. They will help you avoid many hurdles that you’d otherwise encounter.
2. Maximizing What You Leave Behind
The primary purpose of estate planning is to ensure each property passes to your desired beneficiary while your lawyer and the tax expert will advise you on the best option depending on your age, asset type, the estate size, and other similar factors. To maximize what you leave behind, you should:
i. Plan For The Guardianship Of Your Children, Especially If They Are Minors
You should ask yourself who will take care of your kids if you and your spouse die while the kids are still minors. According to estate planning lawyers in Atlanta, you might want to believe your siblings will take good care of your kids, but this isn’t always the case. The best plan is to have any insurance payout or money placed in a trust. The trust will handle the finances until your kids are of age to handle financial matters.
3. Endeavor To Reduce Estate, Inheritance, And Gift Taxes
Taxes can take a big chunk of what you leave behind for the beneficiaries. This is often true if you have considerable assets. Exemption limits do exist where you can give without being taxed.
i. Give Money While Still Alive
You can give to a maximum of $13, 000 without having to worry about gift taxes in most states. Giving away part of your money while alive is a great estate planning tip.
ii. Create an AB Trust
Another great option in reducing taxes on your estate is to create an AB trust. An AB trust simply means you leave your assets to your spouse. If the surviving spouse dies, the property automatically transfers to the children. Although the trust protects you from taxes, it can be a bit expensive to set it up.
iii. Create A Charitable Trust
At times, creating a charitable trust will exempt your estate from taxes. A charitable trust means you give a charitable organization your property or tax. At times, these charitable gifts do save you from federal taxes on your estate.
4. Estate Planning According To Age
Another great tip to help plan your estate is to do so according to your age and marital status. As you grow old, so do your priorities and status in life. With age, you also acquire more property. Continuous growth warrants a periodic review of your estate planning.
i. When You Are Under 30
In most cases, when you’re in your 20s, you don’t have a lot of property. You have a long future ahead of you at this age, which gives you time to acquire wealth. But if you have considerable assets, it’s crucial to have an estate plan in place. If you don’t have one, your property will be distributed per intestacy laws (dying without a will).
ii. Living Together But Not Married
If you are living together and not married, you should make a will. If you die without estate planning, it’s most likely your partner will not receive anything. If you die intestacy, your property might end up with your parents or siblings. If that isn’t what you want, you should plan your estate by naming your partner as the beneficiary.
Having an estate plan is critical. Doing so will mean your property goes to the rightful beneficiary. Estate planning might seem like a daunting task, but it’s not. Enlisting the help of an attorney or tax expert will go a long way to make the process manageable.
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