Estate planning is the process by which an individual or household organizes the transfer of assets in expectancy of death. An estate plan aims to protect the maximum quantity of wealth possible for the intended recipients. A major concern for drafters of estate strategies is federal and state tax law. An estate is the complete property, real and personal, possessed by an individual prior to distribution with a trust or will. Real estate is property and personal effects consists of everything else, for example automobiles, household products, and savings account. Estate planning distributes the real and personal property to an individual’s successors. Don’t let the state dictate where your property goes or the size of your tax bill. Proper estate planning can protect your interests after death or incapacitation.
Estate Planning to Decrease Estate Taxes
Lowering estate taxes is typically done by gifting possessions such as highly appreciated stock directly to loved ones, into a trust for their benefit, or to a charity. Interests may also be gifted in carefully held company entities such as corporations or limited liability companies. This works to minimize the value of the owner’s estate. As soon as the properties or company interests are gifted from the owner straight to the recipients or into a trust for the advantage of somebody besides the owner, the gifted assets can not be included in the value of the owner’s estate for estate tax purposes.
Estate Planning to Create a Tradition
There are various kinds of trusts that can be established not just to lessen or get rid of estate taxes, but also to create an ongoing tradition for future generations. Numerous states permit trusts to continue for hundreds of years and even in eternity, thus enabling their citizens to establish dynasty trusts for their present and future relatives. Others decide to produce a heritage in their community by establishing charitable trusts or private foundations that will offer a self-perpetuating endowment for years to come.BACK TO ALL PRACTICE AREAS