The two things we cannot avoid – death and taxes – are unfortunately the two things most of us do almost anything to avoid talking or learning about. Yet we want both to be as painless as possible. Here are some things that everyone needs to know about death and taxes:
Organization is key. If you have ever been involved in the death of a loved one, then you know that there are a number of things that must be done. And if your loved one left their estate in good order, then you were no doubt very grateful! Organizing all your accounts and policies in one place and letting your loved ones know where your documents can be found will be one of the best things you can do for a grieving family.
Keep track of exemptions. Last year, Congress created a permanent estate tax, indexed for inflation, which was $5.25 million in 2013. In 2014, this rises to $5.34 million. Large gifts made during your lifetime will reduce your estate tax exemption. Keeping track of your exemptions and taking the necessary steps in your estate plan to reduce estate taxes can save your estate and your family from a drawn-out probate process.
Keep taxes in mind. Death does not avoid taxation, which is just transferred from the decedent to his or her estate upon death. Different assets may or may not be subject to taxation, so be sure you know what the tax burden will be on your estate and inheritances left for heirs.
Get help. Unless you are an estate planning professional, you will need help with creating and keeping an estate plan up to date. An estate planning attorney can help you develop a plan that will provide for you now and for your heirs in the future with minimal tax implications and assist with avoiding probate.
The Flanigan Law Group provides Southern California residents with personal attention for estate planning, administration and litigation legal services. When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources. Contact the Flanigan Law Group at 949-450-0041.