Personal taxes are due next month, causing some families to be in a state
of ‘March Madness.’ If you have an estate plan, it’s important to consult with a financial
planner throughout the year (not only at tax time) to make sure you are
maximizing tax benefits, investing strategically, and planning for retirement.
Your financial planner should work in tandem with your estate planning
attorney to ensure that both plans match your personal goals.
Estate Planning ‘Slam Dunks’
Preparation is critical when planning for your future. Though life may
sometimes bring unexpected change, it is possible to create a ‘winning’
strategy by taking several considerations into account. A ‘winning
strategy’ will certainly address how you ultimately fund the estate
you wish to leave your loved ones.
Evaluate Whether to Transfer Wealth During your Lifetime or Upon Death.
As of 2015, there is a lifetime limit of $5,430,000 on tax-free gifts.
This allows for you to transfer assets before or upon your death without
incurring gift or estate taxes. Individuals are able to pass wealth either
directly or through shelters such as a family limited partnership. However,
one must keep in mind the yearly limitation for tax-free gifts. There
are other considerations that should be made as well, such as control
and liability. Transferring assets upon death allows the owner to maintain
control of the asset and also manage the liability for beneficiaries until
their passing. This is often the case with regards to real estate and
Reduce Taxable Income
Contributing to a retirement plan, IRA/Roth IRA or flexible spending account
deferred income that reduces your
taxable income when you retire. Additionally, deductions such as charitable contributions
and mortgage interest can reduce your adjustable gross income (AGI) which
means a potentially lower tax bill. In turn, a larger estate to leave
your loved ones.
Take Steps to Avoid Probate
Estate planning has several financial benefits. It can save you and your
loved ones from having to pay both attorney and court fees by avoiding
probate. All of your last wishes will be overseen by a trustee in charge
of your living trust rather than a judge distributing your property through
the long process of probate. Your loved ones will also be able to avoid
the high cost that comes from probate, and instead of having to pay thousands
of dollars out of their inheritance for probate fees, they will be able
to keep far more of their inheritance for their own use, as you intended.
Strategically Use Your Time to Create a PLAN!
At Mortensen & Reinheimer, PC, we are REAL PEOPLE with REAL SOLUTIONS.
Tax season may bring about madness for some, but planning ahead can help
eliminate YOUR stress! Don’t wait until the last minute. Together
with your tax accountant, we are here to guide you throughout the process.
We have more than 24 years of combined experience and are skilled in estate
planning so that you are guaranteed the highest quality counsel and legal
Please call us today for a consultation to discuss your estate planning needs.