My father passed away on July 17, 2012 without having an updated will. He had plans to change it, do things differently, that he just never found the time to do. As a result, my family was torn even farther apart in the year after his death that it took to complete everything and close out his estate. One of our regular contributors, Rianne Hunter, brings you an informative article today that can help save your family the heartache that ours went through. — Kim —
If you are a high net-worth individual, then it makes sense that you want to preserve your wealth and leave a great inheritance for other family members. Getting an early start on your estate planning can be a smart move that save you thousands of dollars in the long run. With new taxes being created every year, such as the estate tax or even Affordable Care Act (ACA) taxes, it is vital to be savvy in managing your estate plan. Here are some tips to consider for leaving the best inheritance possible.
1. Be smart in how you make gifts throughout your lifetime.
For every gift that you make during your lifetime, you may be saving your estate from serious taxes. For deaths occurring in 2013, every person has an estate tax exemption of up to $5.25 million for all the gifts that he or she makes during a lifetime. In 2014, this figure has been increased to $5.34 million. Giving away gifts ensures that your estate minimizes its tax liability.
2. Take advantage of the marital deduction.
The marital deduction enables a spouse to make tax-free gifts to the other spouse in the course of a marriage or through a trust. One way to make sure assets are protected from taxation is to make as many marital gifts as possible.
3. Invest in tax-free college plans for your children or grandchildren.
A 529 education plan also confers tax benefits on your estate. You can choose to pay for all the educational expenses of your children or grandchildren by taking advantage of a 529 education plan. Unused amounts of the plan may also be transferred to other qualifying members of the beneficiary’s family.
4. Create a revocable trust for future generations.
A revocable trust will make sure that your assets avoid the cost of probate upon your death. This means that you will not have to pay a percentage of the total assets in your estate to cover probate fees.
5. Purchase real estate in a state with homestead laws or use a tenancy by the entirety arrangement.
Homestead protection enables a spouse to retain a full right of survivorship in a home used as a primary residence throughout the married couple’s lifetime. Upon the death of one spouse, the other spouse will automatically keep an interest in that property. This interest is usually a life estate. Creating a tenancy by the entirety is another way to bypass property taxes and save expenses of the estate.
These are of course just a few ideas that a family law firm or a family lawyer could run through with you. Not every idea here is right for everyone. You should thoroughly research attorneys such as those at the Law Offices of Savin & Bursk and other firms to make sure they can help you create the most helpful estate plan for your assets. Contact one of our lawyers to receive immediate assistance in managing your estate.