Death and Taxes: 5 Ways to Plan Your Estate the Right Way

Wednesday, December 23, 2015, 6:00 AM | Leave Comment

When a person passes away, one of the greatest gifts they can leave behind is a well-planned estate.

Here are five steps you can take to make sure that your loved ones will benefit from the directives of your will in the way that you intend.

  1. Assemble an Estate Planning Team

    An estate planning attorney will know the local and federal laws that apply to your assets.

    A tax specialist will be able to advise you on the best way to structure those assets to avoid taxation.

    A financial advisor will be able to make recommendations to ensure that you and your heirs will get the most income from your assets.

  2. Minimize Estate Taxes

    Only some estates are taxed by the federal government, and assets left to a tax-exempt charity or spouse are non-taxable.

    Some states have inheritance taxes, however. One way to minimize taxation for your heirs is to leave taxable assets to exempt charities and tax-free assets to your beneficiaries.

    Because life insurance is not taxable, investing in it is one way to offset any expected estate or inheritance taxes.

  3. Create a Revocable Living Trust

    Often, the best way to ensure that your heirs will receive their inheritance without complications or delays is to establish one or more trust accounts.

    You may want to create separate college and charitable trusts. Anything else of value may be placed in the main trust including checking and savings accounts.

    Another alternative is to designate your trust fund as the payable-on-death beneficiary of your accounts.

  4. Avoid Probate

    When you leave your estate to loved ones with a will, your assets will go through probate, a process which is both expensive and time-consuming.

    According to the estate planning specialists at J Peterman Legal Group, proper planning can ensure your assets are passed on to loved ones without having to undergo probate.

    This planning can be extremely valuable, especially for surviving spouses who will need access to these assets to pay for living expenses during the estate settlement.

  5. Store Your Documents

    Keep all of your documents in a trusted location such as a safe deposit box, and make sure that your executor has a copy.

    Important documents to store include: will, trusts, insurance policies, real estate deeds, stock certificates, bank account numbers, credit card numbers and funeral directives.

These simple steps provide a foundation for wise estate planning.

Your estate planning team will be able to help you navigate the specifics of your own personal situation so that you can leave an estate that provides for your loved ones in the best way possible.

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