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Florida residents who have engaged in the estate planning process may be aware that it is more complex than merely deciding who gets the family condo or grandmother’s prized china. In fact, there may be more variables to the process than most people realize when they get started, such as estate tax planning, which is a serious aspect of estate planning that should be carefully considered to ensure that no errors are made and tax liabilities are considered correctly.
The 2010 Tax Relief Act has been instrumental in holding off tax increases through the 2012 tax year. This Act reinstated the unified gift and estate tax credit at all time highs, while keeping tax rates down for the estate itself, gift and generation-skipping taxes. Inflation has already increased in 2012 and is looking to potentially increase once again in 2013.
When beginning the estate planning process, estate tax planning may not be the best focus throughout, but rather individuals should be mindful of the tax implications without making decisions because of the tax implications alone. Certain questions that can help advisers and clients in the estate planning process may include: what is important about your wealth, passions, values and pursuits of financial security? Which of these do you want to impart to your children and grandchildren? Are there any charities, churches or educational facilities that you would like to be remembered by? These questions can help pinpoint the fundamental elements of estate planning.
Now is the time to start looking into estate planning and providing for the future of yourself and your loved ones. Benefits such as Social Security and Medicare are facing deficits, trusts are easier than ever to establish and fund, flexibility is a commodity that may soon tighten, and it’s never too soon to start preparing for the future. Estate tax planning is an important issue involved in estate planning however it should not be a burden for Florida residents who want to get started. While the tax implications of estate planning are very real considerations, the primary goal of estate planning is to protect your assets, yourself and your loved ones for the future.