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Tips On Easy Estate Planning

Sep 4, 2007
Estate planning is largely done based on the tax exemptions and taxes payable. The federal tax exemption that is granted at present is set at $ 2 million. This means that those who have assets below this amount are safe and can do as they please. A complicated estate with many heirs, different assets etc will require one to get professional help to develop a good plan. Nevertheless, there are ways in which you can identify your estate beneficiaries and at the same time reduce expenses, and increase the inheritance.

The first step towards planning is to find out what the tax exemption is set to in your state. You can do this easily by logging on to the appropriate website. On finding this limit, you can start with the other legal requirements that you need to get done. There are websites that give you information and provide you with a will, power of attorney agreements and other legal documents that you may need. These power of attorney agreement contracts may be priced about $20 or so.

You must review your life insurance policies and retirement policies. The insurance accounts can easily be transferred to the beneficiaries or whoever you may choose. You can do the same with the other taxable accounts in your possession. This includes savings accounts, mutual funds and other investment accounts. To make these transfers valid, the benefactor needs to entitle the accounts as 'transfer on death' or 'pay on death' to the respective heirs. Only then will the proceeds of these accounts be transferred to the beneficiaries. However, if you have a complicated financial situation then you cannot use such simple methods to plan your estate.

A large estate or one that does not qualify for the tax exemption may require legal or professional help. Many estate planners help with proper plans, but ensure that these planners are certified if not, then a lawyer is the better option. You can use title assets to simplify the financial transfer of your life and retirement insurance in the case of your death. For your other investments you can initiate a living trust to stockpile the assets.

You may also have property or other assets that you own in another state or country. This may get difficult to handle when you wish to transfer the ownership upon death. To simplify matters it is best that a lawyer who is an expert in international law and also one who has had experience in real estate planning be appointed. In this way, you will be able to have the best of both worlds by ensuring the lawyer takes care of the legal matters and at the same time provides you with a good plan.

You also have the option of sharing your wealth with the beneficiaries now, so that you avoid paying exorbitant taxes in case of death. In this way you save not only yourself the trouble of estate planning and the expense you incur in getting expert advice, but you also save the heirs a lot of money that they would be paying in taxes.
About the Author
Sacramento CPA Firm Murray and Young offer Tax Representation by a former IRS auditor. For useful articles and tips by Sacramento Estate Tax Planners, please visit our website at http://www.april15.com.
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