SHP Financial's weekly Retirement Road Map show invites Attorney Keith McManus to talk about the legal and financial benefits of estate planning. Everyone has an estate, whether or not they have plans in place and whether they have a large or small net worth. Click on any of the titles below to listen to the discussions.
Minimizing Estate and Gift Taxes
As you plan for your loved ones' future, you may be thinking of gifting assets now as part of a strategy to minimize estate taxes later. The Internal Revenue Code makes gifting a sensible move to maximize tax benefits for yourself and for the person to whom you are giving the assets. But there are risks involved, so be sure to involve both your financial professional and your estate-planning attorney in all gifting decisions.
Protect Investments for Your Heirs
To be sure you make the best decisions for the beneficiaries of your estate, your financial planner should work with your estate-planning attorney. They can work together to advise you of the best way to leave your investment accounts to¬ your heirs, especially if minor children are involved. One way is to designate a trust as the beneficiary of your investments.
Retirement and Estate Planning
Financial and estate planning are not one-size-fits-all enterprises. If your financial advisor knows your goals as well as your financial profile and works with your estate-planning attorney, your plan has a better chance of succeeding. Your legal and financial advisors should communicate about your retirement and estate plans to ensure your plans are linked to meet your goals.
Learning about Estate Taxes
Did you know that the Massachusetts Department of Revenue assesses an estate tax when an estate's net value is more than $1,000,000? One couple who had property in both Massachusetts and in Florida (where there is no estate tax) had gotten advice from a financial planner in Florida, who was unfamiliar with Massachusetts estate law. When they sought help in Massachusetts and drew up trust documents, they reduced the tax burden for their heirs. This illustrates the importance of having the right trust for your situation.
Property and Other Assets: The Type of Ownership Matters
How you hold title to assets such as real estate, whether you are the only owner or share ownership with a spouse or partner in business, can have far-reaching impacts on tax liability and on the way the property is handed down to heirs. It's never too soon to consider the options.
Can Life Insurance Be a Disaster for Your Heirs?
Owning life insurance can be a fantastic investment. But even though the proceeds of a policy are not taxable to your heirs, life insurance may contribute to the value of your estate. If the estate is worth $1 million or more, your heirs could be liable for sizable state and federal estate taxes. That's why it's important to own life insurance in a trust.
Four good reasons to set up a trust
Trusts provide easy ways for heirs to receive assets. But it's not just about setting up a trust. You also need to set up the right kind of trust for your situation. Four points to consider are probate avoidance, estate tax minimizing, lessening the impact of the capital gains tax, and being sure that the assets you transfer to your heirs are protected for them. Work with an experienced estate-planning attorney as well as your financial adviser.
Estate Tax Review: Why Have It Done Now?
Some estate tax laws will be changing after the end of 2016. Any individual with a net worth in the millions of dollars should schedule a professional estate review right away. Your financial adviser, accountant, and estate attorney can help you take advantage of the laws as they stand now, saving your heirs from having to sell assets later to pay estate taxes.
Funding Your Trust
The next step after creating a trust is funding it. If you have a trust and don't move your assets into it, your
estate will still be subject to probate. An attorney who specializes in estate planning should review your plan and trust on a regular basis to ensure hat the trust contains all of your assets.
Why Create a Trust
There are two types of trusts: irrevocable and revocable. Even if you enjoy only modest means, having your assets in a trust can help your heirs avoid the long, expensive probate process and may provide tax benefits.