The last thing people want to do is die without leaving a legacy to their loved ones. However, with all the taxes and fees applicable to post-death transfers of wealth, this can sometimes be an impossible task. There are both financial and non-financial consequences to all estate planning maneuvers. A recent article discusses how to structure your estate plan to save your loved ones from the financial and other burdens that may otherwise result.
As far as taxes are concerned, the method of distribution selected for a particular asset will determine if taxes will be paid on it, who will pay those taxes, and how much those taxes are. In order to anticipate what the tax burden may be on a particular asset or group of assets, a person may wish to employ a financial planner or account in the estate planning process. If you believe that any of your assets will trigger a significant tax bill, consider putting money aside to satisfy that bill.
Additionally, different transfer mechanisms can also be burdensome as they impact how quickly the post-death transfers can occur. Assets that are transferred through a will must go through the process of probate, which can take up to a year. Alternatively, assets transferred outside of probate such as life insurance policies are transferred immediately. Therefore, if you believe your loved ones will need immediate assets following your death, it is important to transfer at least some of your assets through a non-probate transfer.
For assistance in easing the estate administration burden on your loved ones, contact us at (626) 696-3145.
