Many people believe that estate plans are not needed if their assets are less than $5 or $10 million. Yet, the truth is that estate plans can be extremely helpful for families of all different income levels. These plans can protect those you love, if something unexpected happens to you. Trusts will give you the ability to ensure that your loved ones have help, if you are not physically here to offer support. Here are just a few benefits to keep in mind:
Estate Plans Can Protect Your Children
Trusts are a great way to not only avoid estate taxes but also to leave assets to your children over a long period of time, if they are not ready to manage these assets all at once. Also, if you have kids from a previous marriage, a trust will be a way for you to both care for your current spouse and your children, in the case that somthing unexpected happened to you. Also, trusts can also be set up to protect and help grandchildren. Whatever your situation or needs, consider an estate plan to help protect those you love.
Taxes Have Increased
Income, capital gains taxes, and surtax on investment income has incrased within the past few years. Trusts and LLCs have been used to avoid estate taxes while also being able to reduce taxes and giving you the ability to funnel income and money to family members within the lowest tax brackets. You can also consider the charitable remainder trust so that you pay income taxes in lower-bracket years, such as after retirement. Also, consider the following example for those who have stock investments. If you bought stock for $50,000 and now it is work $90,000, you’ll have to pay tax on the $40,000 in gains, if you sell it. However, if something happens to you and you leave your stock to Benny, Benny wont owe any tax if he sells it right way! This helps your heirs as they wont be left paying unnecessary taxes.
Changing Beneficiaries of Your Estate Plan
Are you recently divorced? If so, you’ll want to make sure that you update your beneficiary so that they will get your assets if something were to happen to you. In most cases, married couples will list their spouse as the beneficiary. We all know that the divorce process can be long and stressful, which also results in people forgetting to change their beneficiaries following a divorce. Even if you list someone in your will as the beneficiary, the only way that person will be the beneficiary is if they are listed on the account, such as the 401 (k) or an insurance policy.
Estate Planning Is Complex
An estate plan can be extremely beneficial, in the case that something unexpected happens to you. Make this process easier with the help of an attorney. Whether you are in the early stages or ready to create your estate plan, a The Law Corner attorney can help walk you through the process to make it quick and easy! Please contact The Law Corner for more information at 919-424-8319.