No one wants to talk about dying. But, as the quotation often attributed to Ben Franklin says, “nothing is certain but death and taxes.”
And if you don’t make plans for what happens to your assets after you die, Uncle Sam—as well as several state governments—will reap a good portion of the assets you’ve accumulated from working, saving, and investing. Your first goal should be to protect your estate from taxes, so you can maximize the monies that you pass on to your heirs and beneficiaries.
If you think you’ve full executed all of your estate-planning items, please make sure you read this article “Estate Planning—Uncle Sam Hopes you won’t do it!” in Financial Freedom Magazine, and get a veritable checklist of all the major things—and many of the details—including some items you might easily overlook!
Let’s start with the two primary taxes you need to worry about:
- Estate Tax: For federal tax purposes, learn what the threshold is before taxes kick in. And discover which states also levy an estate tax when you die.
- Inheritance Tax: This is a state tax—find out which states levy this additional tax—on your heirs who inherit assets from your estate. And discover who, specifically, is exempt from this tax, too.
At the most basic level, there are three things you can do to reduce estate and inheritance taxes for your heirs when you die:
- Give your money away before you die: Do you know the right way to give away money, so no one pays taxes? Or the maximum amount so that your recipient doesn’t have to pay tax—except in this one state? And what about types of gifting that are always exempt from the limits—do you know what types of gifts those are? Get all the answers in this Financial Freedom Magazine article!
- Create a Will: Do you have a will already? Even if you think you don’t, the government has one for you! And that won’t be a tax-friendly situation! Do you know the difference between “joint wills,” “mutual wills,” and “pour-over wills?” Find out when you read this article, and get our easy-to-follow, six-step process for creating your will. And what about a “living will?” Hint: This has nothing to do with distributing your assets—read now to find out how to handle your living will, too.
- Set up a Trust: Do you know how to create a trust now to protect your assets and save your heirs time and spare them paperwork headaches later? Do you know the difference between a revocable and irrevocable trust? And what about the other kinds of trusts, such as “Asset Protection Trusts,” “Charitable Lead Trusts (CLT),” “Charitable Remainder Trusts (CRT),” “Special Needs Trusts,” “Spendthrift Trusts,” “Tax By-Pass Trusts,” or “Totten Trusts?” Get all the details when you read this article.
You should really ensure that you properly title all your property—it can make a big difference for the tax implications and who controls the property. In this article, you’ll learn the difference between “Joint Tenancy,” “Tenancy in Common (TIC),” “Tenants by Entirety (TBE),” “Sole Ownership,” “Community Property,” “Corporation Ownership,” “Partnership Owners,” and “Trust Ownership.” Find out which structure best suits your needs.
You should also figure out if life insurance is a good way to provide for your family when you’re gone—to help with immediate funeral and burial expenses, paying off debt including mortgage, providing funds for your heirs to buy out your business partners, or paying for extended medical care or education for a minor child. Find out if life insurance is a good option for you.
Finally, no estate plan is sound without you having granted power of attorney to someone. But did you know there are four different types of powers of attorney—“limited,” “general,” “durable,” and “springing?” Which one is right for you? Discover the answers when you read this article!
You can learn all about how to do estate planning the right way—and spare your heirs the taxes and heartache that comes from poor or no planning at all on your part—when you read this feature story in a recent issue of Financial Freedom Magazine: “Estate Planning—Uncle Sam Hopes you won’t do it!.”
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- High-growth MedTech Stocks Offer Big Upside: MedTech Stocks Come with Risk but the Potential Growth is Enormous
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