No matter an estate’s size, planning is necessary if the grantor wants to ensure that their assets go to the right people. If taxes are a concern, an estate plan can help the creator minimize beneficiaries’ liability. Clients of an Estate Planning Attorney in De Pere WI may find these tips helpful, even if they already planned an estate.
Decide Who Gets the Assets
If a person dies without a will, state law determines who gets what. This includes sentimental, non-financial assets such as cars and jewelry. Clients should be particularly careful here, as beneficiary designations fall under governing agreement terms. In cases involving life insurance policies and retirement accounts, check with the issuing financial institution to learn which rules apply.
Create a Trust for Expenses
If a person plans to allocate some assets to pay final expenses, they should create a trust with the appropriate provisions. For example, a client may want to set aside money for a child’s college education. The trustee is legally required to ensure that designated funds are used for these expenses.
Mitigate Income and Estate Tax Liability
In cases where beneficiaries may owe income or estate taxes on an inheritance, the client may be able to reduce the liability with help from an Estate Planning Attorney in De Pere WI. For instance, a person could leave taxable assets to charities on the beneficiary list, and they could leave non-taxable assets such as a Roth IRA to family members. Clients can also reduce the taxable estate by giving gifts while they are still alive.
Use Insurance to Offset Taxes
Beneficiaries can lose a substantial amount of an inheritance to income and estate taxes, but these losses can be offset by life insurance proceeds. If a lawyer estimates that a beneficiary will owe $250,000 in taxes, the client can buy a life insurance policy for that amount and name the recipient as the policy’s beneficiary.
Many people tend to focus on financial aspects that are relevant during life, and they delay making estate-related decisions because it forces them to face their own mortality. However, failing to plan an estate can cause friction and unnecessary expense for beneficiaries, especially if someone feels like they’ve been left out. Make an appointment with an estate planning attorney from Brabazon Law Office LLC, who can help the client customize their plan to suit everyone’s needs.