Minimizing Estate Taxes and Other Related Problems for Your FamilyDecember 10th, 2013
Eventually, someday, your family will receive your remaining assets from your estate. The transfer may be well planned for and tax-efficient or it may be unplanned, expensive and risky. That choice is up to you and relates to the decisions, if any, you make with your estate plan. Without a written plan, you may give control over the transfer of your assets to the government to decide which may not be in accordance with how you want your assets to be treated after your passing.
If you rely only on a simple will to transfer your assets unnecessary taxes and fees can greatly reduce your family’s inheritance. Your will can very easily become outdated. It is not that a will becomes invalid; it does not. But it may not address your current needs or your current financial and personal situation. The value of your estate may have grown since you drew up your will. You may have moved, acquired more property, had more children or grandchildren, etc.
Careful estate planning can potentially prevent problems with paying for important family needs which in addition to estate taxes might include, assuring the financial strength of your closely held business or paying the higher education expenses of your children or grandchildren. Using trusts in your estate plan may significantly reduce your estate taxes. Special provisions may also be required to provide for family members with special needs or who cannot manage their own funds.
If you own all or part of a business, it is important to consider how and to whom ownership will be transferred after you’re gone. Changes in management, size, and other circumstances relating to your business may require different provisions in your estate plan in order to protect your beneficiaries’ interests. Also, the value of a business can decrease dramatically as a result of an unplanned “estate sale.” Consideration should be given to purchasing “key man” life insurance and to creating a buy/sell agreement.
The value of estate tax planning is very clear. An estate with substantial assets that is professionally planned for minimum tax liability will pay much less in estate taxes than an unplanned estate. The savings can easily run in the hundreds of thousands of dollars. A well-planned estate also ensures that your wishes are honored after you are gone.
Need tax advice? Contact the Tucson Certified Public Accountants at Flowers Rieger today.