![]() Since the IRS places limits around how much money you can transfer and to whom without being taxed, a good estate plan outlines a wealth transfer strategy that attempts to minimize the taxes owed by you or your estate. There are three types of taxes to consider when transferring your money-the estate tax, gift tax and generation-skipping transfer tax. ![]() If you or your family has accumulated a substantial amount of wealth and you plan to transfer it to other family members or loved ones upon your death, the estate planning process can help you develop an approach to do so in the most tax-efficient way possible. Additionally, a will or trust clearly defines how your assets should be transferred upon your death. At a minimum, you should routinely review the designated beneficiaries on your investment accounts and life insurance policies, if applicable, to make sure that they are current. Proper documentation can save your family members time and frustration and will help ensure that your assets are dispersed in the manner you intend. ![]() ![]() If you don’t have a documented estate plan such as a will or living trust, the state where you reside typically decides how your assets are distributed after you die. To Dispose of Wealth in the Manner You Wish Discussing your intentions with those you trust can help ensure that your wishes and needs are met if you’re eventually unable to speak for yourself.Ģ. Additionally, consider designating a healthcare proxy or power of attorney who can make medical and financial decisions on your behalf if necessary. After estimating your cash flow needs leading up to retirement and beyond, think about what insurance you may need if you’re no longer able to provide for yourself. While most people tend to think of an estate plan as something you need when you die, many don’t realize that it can also protect you and your assets in the event you become incapacitated or can’t make decisions for yourself. If you haven’t yet incorporated an estate plan into your overall financial plan, consider the following reasons why you should talk to an estate planning attorney or wealth advisor about your wishes sooner rather than later. While end-of-life planning may seem morbid, an estate plan can protect you and your assets not just after you die, but during your life as well. ![]()
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December 2022
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