There's a widespread
myth that estate planning is only for the
super-rich. The reality is that if you consider
yourself to be solidly in the middle class, or
above, you may be putting your hard-earned assets
at risk if you don't have an estate plan. Estate tax takes a sizable bite
out of any estate above $600,000, so it's
important to realize how much you're really worth
now, and how much your current assets may
eventually grow to be. Taking into account your
home, life insurance, retirement plans, real
estate and other investments, inheritances you
may receive, jewelry and personal belongings,
your assets can easily exceed the federal estate
tax threshold.
With some planning,
however, you can minimize estate tax and possibly
escape it completely. The first step is to
inventory your assets to determine your potential
liability. Then, we can tailor a plan to suit
your particular situation.
There are many tools at
our disposal. A lifetime giving program is one of
the best ways to transfer wealth to your children
tax-free. You can transfer as much as $10,000
each year ($20,000 if your spouse joins in making
the gift) to as many people as you want without
any gift or estate tax liability. Larger gifts
that you make during life (and anything earned on
those gifts) won't be subject to estate tax
although gifts may push the estate into a higher
bracket. There are also ways to transfer larger
amounts without having to pay any gift tax.
Spouses can make
tax-free transfers to one another, and can set up
special kinds of trusts to ensure that spouses
and children are both taken care of with the
least estate tax liability. These strategies also
help ensure that any estate taxes that are owed
won't be due until after the death of the second
spouse.
You also might be able
to benefit from a life insurance trust, which can
keep insurance proceeds free of estate tax. And
there are special estate-tax strategies for
business owners that can help keep a family
business going after the founder's death. There
also are opportunities for the charitable-minded
to benefit both family members and a charity
while cutting estate tax and saving income tax
currently.
Of course, another
important element of your estate plan is your
will, which lets you control and direct the
disposition of your estate. Without one, state
"intestacy" laws will determine who
gets what without regard to your wishes or your
survivors' needs. Your will also should name a
guardian for your children. Even if you already
have a will, you might have to change it
occasionally to reflect changes in the law or in
your circumstances.
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These are just a few of the
many estate planning techniques that may
be available to you. If you have any
questions about developing an estate plan
or revising an existing one, we are
available to provide the assistance you
need.
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Nolan Schexnayder, and
his wife and staff, are friendly, easy to
work with, and available to
professionally assist you with your
financial affairs!
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You can
reach us at (504)
652-2877, call us today to
develop or to update your estate plan.
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COPYRIGHT
1997 - CCH INCORPORATED.
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