Estate Planning
Estate planning should be an integral part of your overall financial planning activities. After all, you have worked hard all your life to enjoy a good lifestyle and build up a good asset base. Passing on the results of that hard work and good fortune to your children and grandchildren is important to many people. They want to make sure their kids have more than they had, and the assets passed on through estate planning can give those children a great head start toward a good life.
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It is important to take the effect of taxes into account when doing your estate planning. The taxes affecting estates have changed quite a bit in recent years, and it is now possible to pass on a fairly substantial amount of money with little or no tax consequences. However, tax law is always subject to change, and it is a good idea to keep up on changes to tax law and you go forward with your estate planning. This is particularly important if you are passing on hard assets like real estate or business interests.
Seeking the help of a good tax attorney is often a wise investment when doing any kind of estate planning. The time and money you spend in consultation with an attorney versed in the latest tax law will be rewarded with potential tax savings and reduced hassles when the time comes to pass on your estate to your heirs.
Keeping an updated list of all your assets and real estate holdings is a very important part of estate planning. It is a good idea to update this list at least once a year; tax time is a good time to go through this exercise. Having a detailed listing of your assets will be a big help when the time comes to pass your assets on to your children or grandchildren.
Likewise, if your estate consists primarily of real estate or a business, it is important to keep the assessed value of those assets updated for estate planning purposes. Real estate prices can change dramatically from year to year. Knowing the current value of your real estate holdings will help make your estate planning much easier.
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Business assets often fluctuate in value as well, often much more than stocks, bonds and other more traditional assets. If you own a business, its value will be affected by such tangible items as the assets it owns and its financial performance. In addition, the value of the business can be affected by things outside your control, such as the direction of the overall economy or a downturn in your industry. It is important to update the estimated value of your business assets on an annual basis. Keeping the value up to date will help your heirs to avoid any unnecessary taxes when they become they owners of the business.
Estate planning is not an easy or fun subject to deal with. After all, no one likes to think that they will die some day, and your children and grandchildren will be understandably reluctant to deal with the subject. However, it is important for your financial well being and peace of mind to get together with your family and discuss your estate planning at least every couple of years. The estate planning you do now will help relieve your family of an additional burden at a difficult time.
