Never Underestimate the Power of Estate Planning

Mar 22, 2017

Our estate planning team understands how important preserving wealth can be for future generations of loved ones. If your estate is over a certain dollar threshold, your tax due can be significant, so early planning is even more beneficial.

Determining assets and liabilities, as well as who your beneficiaries are, can go a long way toward planning for the future. Planning and coordinating with various advisors – accountants, attorneys and executors – can be a tedious process. However, your family will benefit greatly from your due diligence. 

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Currently, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. What does this mean for you and your family? An individual can leave up to the exemption amount and not pay a federal estate tax. Additionally, a married couple can gift up to $10.98 million before reaching the 40% estate tax.  Although some may think estate issues only impact high net worth individuals, proper estate planning can be beneficial to all taxpayers.

When considering your estate planning, there are several things you want to take into account. 

Your Will.

The first is a will.  This is very important!  Most people think that wills are only for the wealthy or individuals with children – that’s not true.  Everyone needs a will. You don’t want your assets going to just anyone!  You also need to make sure your will is up to date – especially after life events such as marriage, children and divorce.

Your Beneficiaries.

Secondly, pick your beneficiaries and anticipate their desires and needs.  Is one of your beneficiaries a special needs parent or child?  Will the beneficiary be able to handle the potential wealth they are going to receive, or should you put the assets in a trust?  If you own a business you need to consider if your beneficiaries have the desire to run the business or will they sell it.

Your Executor.

Next, consider who will be your executor. This person is responsible for carrying out your wishes according to your will.   The executor should be someone who can handle the responsibility and will understand their role.   This person does not have to be a family member. You may want your executor to be a trusted friend or advisor.

Your Assets and Liabilities.

Lastly, look at your assets and liabilities and estimate your net worth upon death.   You could gift appreciable assets out of your estate today and put them into a family limited partnership, or other appropriate structures.  This has been a popular move in the past, as it is a good way to manage the holding of assets that will appreciate out of your estate.  Love a particular charity? You may choose to leave some or all of your wealth to that organization.  There are many possibilities – as long as you plan ahead!

With the political changes over the past few months, there has been tons of talk on estate taxes and what they will look like in the future.  While there are no specific plans right now, changes are coming!  Regardless of these modifications, it’s imperative to take care of your estate now. It’s never too early to put yourself and loved ones in a more secure financial position…both for the present and the future.

Founded in 1962, Weinstein Spira is a highly respected firm of experienced tax, audit, business management and estate planning advisors who proactively serve discerning, privately held businesses and leaders in the Houston area and beyond. More information about the firm can be found at www.weinsteinspira.com.



Category: Tax