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Faltering on Estate Planning Can Lead to Thorny Wealth Transfer Issues
Author: Scarinci Hollenbeck, LLC
Date: June 5, 2013
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Most business owners and affluent Americans were pleased when lawmakers announced the $5.25 million – or $10.5 million for couples – estate tax exemption. Many middle-income individuals or local business owners may have put off estate planning strategies, thinking that they will never accrue or pass on enough wealth to meet the new thresholds. However, estate planning is crucial for nearly all individuals, and reaching the tax exemption levels may be more probable than many people realize.
A recent New York Times article highlighted this scenario, explaining that individuals or couples who dismiss frequent changes to federal tax law today and later undergo a significant life event or change to their financial situation may pay for this oversight in the future. Assets are frequently fluctuating based on employment, marriages, births, deaths, and business success. Undergoing the initial phases of estate tax planning in the present may encourage individuals to stay abreast of future changes to the Tax Code that may impact them.
The new changes to the Tax Code have been labeled permanent, but many individuals with considerable assets remain concerned that lawmakers may change the exemption amounts in the future, the Times reports. One strategy business owners and affluent Americans are relying upon to provide additional measures of protection are a variety of trusts. Depending on the unique circumstances of each person, a trust has and continues to be one of the most highly utilized wealth transfer vehicles individuals are seeking to limit their tax exposure and keep their assets intact.
However, there are several types of trusts, each of which may differ to meet the specific needs a family. Therefore, individuals of all income classes may benefit from consulting a tax attorney who specializes in the field prior to setting up the vehicle.
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Faltering on Estate Planning Can Lead to Thorny Wealth Transfer Issues
Author: Scarinci Hollenbeck, LLC
Most business owners and affluent Americans were pleased when lawmakers announced the $5.25 million – or $10.5 million for couples – estate tax exemption. Many middle-income individuals or local business owners may have put off estate planning strategies, thinking that they will never accrue or pass on enough wealth to meet the new thresholds. However, estate planning is crucial for nearly all individuals, and reaching the tax exemption levels may be more probable than many people realize.
A recent New York Times article highlighted this scenario, explaining that individuals or couples who dismiss frequent changes to federal tax law today and later undergo a significant life event or change to their financial situation may pay for this oversight in the future. Assets are frequently fluctuating based on employment, marriages, births, deaths, and business success. Undergoing the initial phases of estate tax planning in the present may encourage individuals to stay abreast of future changes to the Tax Code that may impact them.
The new changes to the Tax Code have been labeled permanent, but many individuals with considerable assets remain concerned that lawmakers may change the exemption amounts in the future, the Times reports. One strategy business owners and affluent Americans are relying upon to provide additional measures of protection are a variety of trusts. Depending on the unique circumstances of each person, a trust has and continues to be one of the most highly utilized wealth transfer vehicles individuals are seeking to limit their tax exposure and keep their assets intact.
However, there are several types of trusts, each of which may differ to meet the specific needs a family. Therefore, individuals of all income classes may benefit from consulting a tax attorney who specializes in the field prior to setting up the vehicle.