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Estate Planning Strategies

On Behalf of | Jun 13, 2016 | Uncategorized

We are more than half way through 2016, and if you have not yet reviewed your estate plan, it is not too late to do so. The estate planning attorneys at Snee, Lutche, Helmlinger & Spielberger have provided information regarding 3 specific estate strategies that you should be aware of when updating your plan.

Establish Trusts

Trusts are important tools for ensuring that your money is used the way you intended after you are gone; and for lessening the impact that taxes have on your estate. In setting up a trust, you may choose the beneficiaries (who receives the assets from the trust), and the trustee (who oversees the trust). You may also control when and how money is distributed, and manage beneficiaries as necessary.

Specifically, when creating an irrevocable trust, the ownership of assets is transferred from you to the trust itself—removing a certain degree of tax liability for those assets. For individuals whose assets total more than the current estate tax exemption ($5.43 million), an irrevocable trust is a safe way to ensure that your beneficiaries inherit your estate without extensive taxation.

If you have not yet established any form of trust, it is important that you speak with a skilled estate planner prior to doing so, as the process can be confusing and overwhelming if you are not familiar with these tools.

Give Gifts

The Internal Revenue Service permits tax-free gifts of up to $14,000 per person, per year. Gifting your assets to your loved ones is a strategic way to limit the estate tax liability, or to reduce your total assets so that you can qualify for the current exemption.

Charitable donations are another great way of gifting your assets. There is no limit to how much money you are allowed to donate each year, and the money that you give is tax deductible. Further, there are tax deductible funds that permit you to hold assets for long term charitable distribution, which may also be passed down to a beneficiary through an estate.

Evaluate Your Beneficiaries

Trusts are not the only accounts with designated beneficiaries. When taking out an insurance policy, an individual must establish beneficiaries to receive the policy funds. Despite what type of accounts you have established for your estate, it is important that you routinely evaluate and update the beneficiaries that have been designated.

There are many reasons for this. For instance, people often list spouses as beneficiaries, only to realize years after a divorce or a second marriage that they never updated this on their various estate documents. Reevaluating the beneficiaries on your accounts after major life events such as birth, death, marriage, and divorce, can ensure that your assets are transferred to the right person when the time arrives to disburse them.

It is never too early or too late to update your estate plan and accounts. Taking the time to do so will prevent your loved ones from going through the long and often arduous probate process. For questions about estate planning strategies, or to discuss your individual estate planning needs, contact Steve Lutche at Snee, Lutche Helmlinger & Spielberger, P.A.