Estate taxes, also known as inheritance taxes, can be imposed on the transfer of property after death. Without careful planning, the estate of a deceased person may be subject to significant taxation. Fortunately, an experienced estate planning attorney can work with you to ensure that your assets are safe from unnecessary taxation. With their assistance, you can significantly reduce or even eliminate these taxes.
Here are four things an estate planning attorney will do to help you avoid unnecessary taxation.
Evaluate Your Assets and Liabilities
One of the first steps in any estate plan is to evaluate your assets and liabilities. This includes everything from income, investments, property holdings, insurance policies, and other assets. An estate planning attorney can help you understand your current financial situation and determine how these assets will be transferred. They'll also advise you on how to structure your estate to minimize tax liabilities.
Create Beneficiary Designations
Beneficiary designations are a key component of estate planning that is often overlooked. If assets are not properly assigned, they may end up in the wrong hands after the owner passes away. This can burden their loved ones greatly and may even result in unnecessary taxation. An estate planning attorney can guide you through creating beneficiary designations for each asset in your portfolio so that they are transferred directly to the people or organizations you have chosen as beneficiaries when you pass away.
Estate planning attorneys can draft documents such as wills, trusts, and powers of attorney to ensure that your estate is distributed according to your wishes. These documents can also be used to minimize taxes when transferring assets to your beneficiaries. Additionally, they can be used to protect your assets from creditors and eliminate disputes among your heirs.
Update Your Plan
Your estate plan should be updated regularly as your financial situation changes. An experienced estate planning attorney can help you avoid any obstacles, such as changing tax laws or economic conditions. This will always keep you prepared for the future. They can also help you understand the consequences of certain actions and how they can impact your future financial status. For instance, they may recommend making gifts or setting up trusts to help you avoid unnecessary taxation.
If you are concerned about the taxation of your estate, it is best to consult with an experienced estate planning lawyer. With their help, you can rest assured that more of what you leave behind will benefit those you hold dear.
Reach out to an estate planning attorney near you to learn more.