In general, basic estate planning involves a simple will and maybe a living trust. However, if you have high-value assets including real estate, a comprehensive stock portfolio and other complex investments, you may want to consider taking a more advanced approach to estate planning. Beefing up your estate plan can not only help reduce estate taxes, it can protect your wealth for future generations.
While there are numerous benefits to drafting even a basic estate plan for your property in the Hudson area, it can be much more beneficial to do some advanced estate planning. Here are some common benefits of putting an advanced estate plan in place.
Reduction in estate taxes
Like many people, you probably want to reduce your tax burden as much as possible. While you may be taking steps to reduce your annual income tax liability each year, don’t forget that your estate may also be subject to taxes when you die. If you want to limit these taxes so that your heirs and beneficiaries receive as much of your estate as possible, you may want to consider moving your assets into an irrevocable trust for the eventual transfer. If the trust is irrevocable, then the assets are technically owned by the trust and not by you personally. This means that in the eyes of the Internal Revenue Service (IRS), these assets are not part of your taxable estate.
Leave behind a legacy
If you are concerned for future generations beyond your children, you may be looking for a way to transfer your assets to grandchildren, great-grandchildren and so on. There are various trusts available that can safeguard your wealth so that it can be passed down to future family members. Some trusts can be in effect for hundreds of years or even perpetuity.
Protect your assets
Whether you have only accumulated a little bit of wealth or you own extensive property, advanced estate planning can protect your assets. For instance, you might work in a profession that has a high risk of litigation. You may be able protect your property from a lawsuit by transferring your assets to a trust. Moreover, moving your property into a trust might also help protect it from the ravages of divorce, creditors and other situations that could seriously damage your finances.
If you have not started the estate planning process, it is not too late. Whether you have a little or a lot, there is no time like the present to take steps to protect the assets you have worked so hard to accumulate.