A Guide to Estate Planning: Legal and Taxes
Estate planning can be a daunting task. Many people find estate planning to be too complicated, and they put it off for years. This is never a good idea because estate planning should begin as early as possible. If you don’t have an estate plan in place, there could be major consequences that will affect your family and your finances.
An estate planning lawyer, like one from Attorney W.B Moore, specializes in helping clients create wills and trusts so they can avoid probate court at their passing while providing the necessary tools to leave something behind for those who matter most to them during life’s final moments.
In this guide, we will cover the basics of estate planning as well as some personal experience with taxes. We will also review estate tax exemptions and some last-minute estate planning tips.
Basics of Estate Planning
When it comes to estate planning, there are a few basic things you need to know. These estate planning strategies can help you keep your estate safe and secure, as well as teach those around you the importance of estate planning.
The first estate planning strategy is establishing a will or testamentary trust. This document outlines how an executor should distribute your assets after death. It also prevents any assets from going through probate, which is a time-consuming and costly process. An estate planning lawyer can assist you with this.
A will or testamentary trust can also serve as estate planning guidance for those around you to ensure that your wishes are carried out after death. You should be specific in your estate planning documents, so there isn’t any confusion about how property, debts, and other assets should be distributed among family members and friends.
Estate Tax Exemptions and Planning Strategies
You need estate planning in place to avoid estate taxation, but what does that entail? It’s important for you to understand estate tax exemptions before entering into estate planning because it will help you plan accordingly. The federal government has two types of estate tax exemptions – exemption amount and unified credit exemption amount.
The estate tax exemptions determine the maximum estate value that an individual can pass down. If you exceed this limit, then estate taxes will be assessed and could reduce your estate significantly. You need to plan accordingly so that you don’t fall into such a situation.
Let’s review some estate planning strategies for avoiding estate taxation:
- Give away your assets before you die. This will reduce the estate value and could help you avoid estate taxes.
- Use a trust. Trusts can be used to bypass estate taxation and can also protect your estate from lawsuits, creditors, and bankruptcy.
- Have life insurance policies in place. If something happens to you, the life insurance payout can make up for estate losses.
- Give assets to your spouse or family members. This will reduce the estate value and could help you avoid estate taxes.
An experienced estate planning lawyer will listen closely to your goals, help you understand all of the options available and create a customized solution that fits both your needs and budget. We have helped many families avoid these problems by creating comprehensive plans that are tailored specifically for them at affordable prices.