Ideally, an estate plan should encompass much more than a basic Last Will and Testament. Although a Will usually serves as the foundation for any comprehensive estate plan, your plan should not stop there. Numerous other considerations should go into a well-rounded estate plan, including the tax implications of your plan.
People often make the mistake of turning to boilerplate estate planning forms found on the internet in an effort to cut expenses when creating an estate plan. While there are a number of reasons why these forms should not be used, one important reason is that they do not address the tax consequences of using them.
Under the U.S. tax system, all gifts made during your lifetime and all estate assets owned at the time of death are potentially taxable. While there are numerous exemptions and exclusions to the general rule, do-it-yourself forms cannot advise you or guide you regarding the tax implications of using the forms. They are also unable to offer suggestions for how to incorporate the exemptions or exclusions into your estate plan. Only an experienced estate planning attorney can do that.
Frequently, an estate ends up losing far more in fees and taxes than the testator saved by using boilerplate forms. If you are planning to sit down and create your estate plan in the near future, do not take the risk of losing estate assets to taxes. Take the time to consult with an estate planning attorney to ensure that all of your estate assets are protected and available for your loved ones when you die.
- The Magic of Grantor Trusts - November 1, 2023
- IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis - October 26, 2023
- Understanding the Importance of the Simultaneous Death Act - October 19, 2023
