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Estate Planning

Why have an Estate Plan?

If you do not have an existing plan, you should at least talk about this issue. It's not the easiest topic to talk about, but a highly critical part of a financial plan. If you already have an estate plan, it should be reviewed regularly to make sure it accomplishes your current goals. 

There are some very good reasons to develop an Estate Plan. Among them are the following:

  • Reduce the amount of estate taxes owed
  • Distribute assets the way you want
  • Ensure liquidity for estate settlement expenses

Strategies for Preserving Your Wealth

If you have assets over one million, you will be subject to NY State Estate Tax. If over $5 million (current law), a minimum of 35% would be owed to the Federal Government for taxes alone. That may seem like a high level of assets, but when you include your home, retirement accounts, business, etc., that amount can add up quickly. And if you figure in growth over the remaining part of your life, that can happen sooner than you think.

Fortunately, there are some strategies you can use to minimize these taxes and plan properly:

  • Update your will.
  • Maximize your Federal Estate Tax Exclusion. Do you have a bypass trust in your will? Be sure you do.
  • Title your assets properly. In order to take advantage of the Federal Estate Tax Exclusion, consider owning assets in your individual names rather than in joint ownership.
  • Avoid probate. Be sure all your accounts have proper beneficiary designations or are entitled Transfer on Death (TOD).
  • Gift assets. If you can afford it, do it. We can help you make that decision.
  • Have enough liquidity to pay the tax. The IRS gives you nine months to pay the tax. Sometimes Estates are settled long after that. Having some life insurance may help in this situation.
  • Put life insurance in an irrevocable trust. This can avoid all income and estate taxes.
  • Have a health care proxy and living will. 

    Call today to ensure that your plan is in place.