Did you know that the net worth of American households rose by an impressive 14% in 2013? It’s true and now, the record figure sits at a whopping $80.7 trillion. This certainly hammers home the importance of proper estate planning and asset protection.
A proper estate plan can transfer property to your heirs at your death, protect their inheritances (that you worked hard to accumulate over the years), reduce estate taxes, avoid probate and maintain your privacy. It also allows you to name people to ensure your final wishes are met, whether it’s a medical issue, financial or legal considerations. It’s about stability, security for your family and protecting your estate.
High Wealth Estate Planning
For those who’ve seen impressive leaps in their net worth, the time for estate planning is now. We never know what tomorrow brings and for those with high wealth considerations, there’s simply too much at stake to put it off.
With the end of the year drawing near, it’s a great time to begin considering your options and seeking out the right legal representation who can provide guidance for high wealth estate planning. A lack of planning can leave your loved ones vulnerable – not to mention a massive tax bill they face because of an inheritance that comes with the wrong protections – or worse, no protection. The right trust can eliminate that fear.
And here’s something some clients are surprised to learn: many high-net worth individuals are turning to their life insurance as a solution for creating liquidity in order for their assets to be passed down from one generation to the next. Our experienced estate planning lawyers understand how these tax laws work and how to ensure they’re working for you. You can easily avoid the many pitfalls while protecting your family in the process. Typically, there are four important tax dynamics that those with high wealth need to plan for. Income taxes are just the beginning. Gift taxes, estate taxes and generation skipping transfer taxes are important, too.
Gift, Estate and Generation Skipping Taxes
Gift taxes are paid anytime you gift any of your assets to another; generally, those making gifts over $5 million need to consider this as it’s part of a lifetime gift tax exemption. Estate taxes are important for those with estates more than $5,340,000 in 2014 and $5,430,000 in 2015. Generation skipping taxes, or GST are paid when you leave assets to your grandchildren or even great grandchildren. Overlooking these taxes have consequences. Your estate planning lawyer can help provide direction on how to remain compliant with the various federal and state tax laws.
Remember, the stock market is breaking records every day. The economy is on the mend as far as anyone can tell, but the past several years have proven to be anything but predictable. It’s important to plan and not underestimate worst case scenario. It all goes back to putting the strong foundation in place to ensure you and your assets are as insulated as possible. Now’s the time to put those mechanisms in place. You’ll enjoy the peace of mind that comes with covering those bases. Give us a call today to learn more about high wealth estate planning.