3 Important Facts to Know About Estate Planning
Your estate consists of everything in your name, from your car and home to furniture and financial accounts, so you need a plan to pass your estate on to others after you die. Rather than dreading this task, think of it as the ultimate form of preparation and organization that will help your family in the future.
What Is Estate Planning?
Estate planning is the process of arranging the management of your estate during your life and after your death, particularly in order to distribute your assets as desired and minimize the taxes accrued. When estate planning is done right, it guarantees that your children, grandchildren, and spouse will not have to make sacrifices or suffer financially after your death so that a tampa criminal defense attorney is not required if a dispute were to occur.
Double Check Beneficiary Designations and Asset Titles
This is a frequent pitfall that most people don’t know they even need to avoid. Even if you update your will and revocable trust, that information cannot override the disposition of assets that have beneficiaries listed, like IRAs, annuities, and life insurance policies. In order to ensure that your assets are passed to the right person, you need to have that person’s name not only in the will but also on the asset itself.
Avoid Probate with a Revocable Trust
Probate is a court in which heirs to the deceased prove the will is valid and assets can be transferred from the deceased to the names provided in the will. This can take at least six months, or often much longer with complex estates. Creating a revocable trust can replace the need for a will by designating who receives each asset upon death and allowing those assets to pass to the heirs without the need for a probate attorney tampa. It’s a huge convenience and comfort factor to have a revocable trust.
Reduce Taxable Estate
If you know that your estate will be valued at more than the federal estate tax exemption level, which is $5,450,000 per individual in 2016, then you should make annual tax-free gifts to minimize your taxable estate upon death. Up to $14,000 can be gifted per spouse each year without accruing a federal gift tax. Paying tuition for the benefit of another can also be considered a tax-free gift.
The good news is that you don’t need to tackle your estate plan alone. Find an experienced tampa estate planning attorney to guide you through the process and make sure you have included every important component to protect and support your family, assets, and legacy in the future.