Many people underestimate the importance of estate planning. They often think that a will is enough to take care of their estate, but estate planning is much more than that. Planning someone’s estate requires the anticipation, arrangement, management, and disposal during a person’s life in case of incapacity or death.
Estate planning is not as straightforward as merely naming your estate’s beneficiaries. There are different elements included in this crucial exercise which require expertise, knowledge, and analysis. One of these is your estate planning’s taxes. Without proper planning, the beneficiaries could pay up to 40% of an estate’s value in taxes.
Fortunately, an estate lawyer can help you through the legal minefield and help you minimize your tax burdens when you plan your estate. You will avoid the disagreements that could arise between your heirs and beneficiaries, especially if they have a clear understanding of your plans for your estate when you are physically or mentally incapacitated or have passed away. In Vancouver, British Columbia, there are estate litigation lawyers that can help beneficiaries and families to reduce estate taxes upon the demise of a family member. Here are some of the options they offer to help families resolve estate tax burdens.
Transfer Wealth over Your Lifetime
When you transfer your estate by spreading it over your lifetime, you will reduce your taxable estate. You can give your estate as annual gifts to your beneficiaries. The legal tax-exempt limit for these annual gifts is $14000. Remember that these gifts are irrevocable, so you should be certain of your recipients before transferring any gifts.
Another way of transferring wealth is to donate a considerable amount every year to a charity that you support. Any donation is considered tax-free in many countries, so could lessen your estate tax over time.
Have a Life Insurance Separate from Your Estate
Any income that proceeds from life insurance is tax exempt. These proceeds are a considerable part of your taxable estate so that you could hold your life insurance in an immutable trust. The proceeds from your life insurance could then be held in a trust, which is non-taxable. As such, these proceeds will pass to your estate’s inheritors tax-free.
Get Tax Exemption Now For Assets Which Appreciate Fast
Some people are allowed an estate tax immunity, which they can request at any time. You should claim it now for assets which have a rapid appreciation rate so that you could maximize this exemption. People who do use this strategy could help them save a tidy sum in the future when they do not have to pay so much for the assets that have gone up in value.
You might assume the above tips are easy to handle, but the best way to handle estate planning is to listen to the advice of a professional. Your estate planner could handle the various legal documents and procedures so you could plan what happens to your estate when you have passed on or are severely ill. Your lawyers will ensure that the strategies you use will follow the law and benefit your heirs.
