What part of your estate would you like your family to liquidate in order to pay your estate taxes?
Most of us are pretty good about taking care of our present needs and protecting the things we value. But surprisingly, many of us never take the time to address what could be our biggest financial questions.
- Who will receive your estate?
- Will you owe federal or state taxes and, if so, how much will you owe?
- Where will the money come from to pay the taxes?
- If cash and other liquid assets are available to your heirs are sufficient to pay the taxes due, will they have to liquidate your estate?
Without proper planning, estate taxes could consume a substantial portion of everything you own.
Proper estate planning now can help you reduce the amount of taxes your estate will owe, as well as allow you to plan for how the assets you've accumulated over your lifetime will be distributed.
The most common estate planning tools include:
- Wills - a legal declaration of how you want your assets to be distributed when you die.
- Trusts - a method of transferring property to your beneficiaries with several tax and non-tax advantages.
- Charitable gifts - ways you can distribute a portion of your assets to selected organizations, thus reducing the amount of taxes you owe.
- Life insurance - providing the cash your family needs to maintain their lifestyle and the liquidity needed to pay estate taxes and settlement costs.