Forbes recently published an article that provides helpful estate planning tips for both those with estate plans in place and those who are just beginning the planning process. The five estate planning tips listed in the article are below:
- Prepare a will that declares who inherits both financial and nonfinancial assets. Assets that have beneficiary designations may not be governed by a will, so it is important to consult with the appropriate financial institution to determine what rules apply.
- A trust can help ensure that certain assets are allocated to cover specific expenses like college and special needs expenses.
- Consider using tax-efficient strategies to lower or eliminate the estate and income tax your beneficiaries will owe on their inheritances. These strategies include gifting amounts to beneficiaries and leaving taxable assets to charities while giving tax-free assets to beneficiaries.
- Life insurance proceeds can be used to offset estate and income taxes. Life insurance proceeds are tax-free, and the entire amount can be used to pay taxes owed by beneficiaries.
- One of the best way to create an effective estate plan is to work with an estate planning team. Involving an estate-planning attorney, a tax professional, and a financial advisor can help ensure that the estate plan is the best fit for the size of the estate and the outcome desired.
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