Estate planning involves making arrangements for one's assets prior to death or incapacity. To create an effective estate planning strategy you must account for tax and non-tax related matters. It's important to work with an estate lawyer who can help you with the end of life legal process. Working with an experienced attorney will help you feel secure that assets will be handled according to your desires. When planning, be sure to consider the following estate law issues.
A Will or a Trust?
The first major hurdle to pass is determining whether you need a will or a trust. Most people will choose a revocable living trust to carry out their estate plan. Revocable trust are a perfect fit for those who want to continue managing the estate during their lifetime. The trust will automatically kick in when the trustor becomes critically ill. During this time, the trust can help by empowering your chosen guardian to manage your estate. At the time of death, the trust will also distribute your assets as you desire in the same way a will does.
The main benefit to having a trust is that your assets won't be subject to probate hearings. Probate is a long, drawn out process that can keep your estate in turmoil. Going through probate can also be a very expensive process which could reduce the value of the estate. All in all, it is best to use estate law to avoid probate.
Taxation of Estates
Whether or not your estate is taxable by the federal government depends on its value. Your estate can get up to $625,000 before it is subject to estate tax. Note that this amount includes the value of all of your assets. Real property, life insurance, retirement accounts and personal property is all included. The value of these items is measured at fair market value. You can speak to a business attorney or real estate lawyer for more information on the current value of your assets.
In the end, you will be liable for the amount that exceeds the $625,000 figure. Other deductions may also apply. Estate taxes are a serious issue. This end of life tax could end up costing your estate up to 55% of its value. This is a significant amount to give away to the government. Therefore, it makes sense to use estate law to reduce the potential amount owed.
Dealing With Estate Taxes
Estate law allows you to employ a few different techniques to lessen the burden of estate taxes. An experienced lawyer may advise married couples to defer taxes until the death of the remaining spouse. An experienced attorney can also help married clients to combine their tax free income allowances. This gives them more wiggle room to avoid the estate tax. Consult an attorney to help you find other ways to deal with the estate tax.
You can always contact T.R. Spencer Law Office for estate law help in Utah. Don't make the mistake of leaving estate planning to the last minute.