There are people who are under the impression that they don’t need to work with an estate planning attorney to develop a comprehensive estate plan. They haven’t looked into the subject very deeply and they make the assumption that drawing up a will that expresses how they want their assets divided is not a very complicated matter. You simply inventory your assets, identify the size of the pie and split it up as you see fit.
The fact of the matter is that when you look into it there are sources of asset erosion out there that can greatly reduce the value of your estate if you do not take legal steps to avoid them. One form of asset erosion that you must be aware of if you want to make intelligent plans for the future is the federal estate tax.
Some people who have heard of the estate tax automatically assume that they don’t have to concern themselves with it because they don’t consider themselves to be wealthy. This is a mistake because depending on the estate tax exclusion that is in place at the time of your death your heirs could be exposed to the tax even if you are not truly rich by most people’s standards.
At the present time the estate tax exclusion is $5 million, but it’s going down to just $1 million at the end of next year. In 2010 there were approximately 8.4 million households in America with assets exceeding $1 million. So that is a lot of families who will be subject to the federal estate tax in 2013 unless changes to the parameters are implemented between now and then.
If you want to be prepared, you need to make careful advance plans. The best way of doing so would be to sit down with an experienced estate planning attorney who will evaluate your unique situation and make personalized recommendations that provide you with the estate tax efficiency you need to ensure a robust legacy.
- Common Mistakes in Estate Planning – IV - June 14, 2023
- Common Mistakes in Estate Planning – Part III - June 7, 2023
- The Not-So Transparent Corporate Transparency Act - May 30, 2023
