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Estate Planning Tips for the Present and Future

Updated: Dec 15, 2023

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Estate planning in the United States could be subject to potential tax modifications following proposed changes by the new administration. Although these alterations may or may not come into effect, they serve as a significant reminder of the impact of tax regulations on investments and the inheritance of our assets for our loved ones. To navigate these potential changes and ensure a solid financial future, consider these essential estate planning tips and rely on this comprehensive estate planning guide.

Staying Proactive with Essential Estate Planning Tips

Amidst the uncertainty, remaining vigilant about your estate planning strategy is vital. Here are some crucial considerations to keep in mind, ensuring that your estate plan is well-prepared for the future. As you delve into this estate planning guide, remember to incorporate these insights to navigate potential changes and secure your financial legacy.

Insights into Estate Tax Proposals

As of 2021, the federal estate tax exemption for an individual is set at $11.7 million, with a 40% tax rate applied to assets exceeding this threshold. Looking ahead, if no modifications occur, the exemptions will revert to $5 million in 2026. However, proposed changes could decrease the exemption to $3.5 million and elevate the estate tax rate by 2022.

Leveraging the Benefits of Trusts

Creating an irrevocable trust necessitates relinquishing control over assets placed within it, yet it offers estate tax exemptions and avoids probate proceedings upon your passing. By avoiding probate, your beneficiaries can avoid unnecessary court expenses and maintain the privacy of your financial matters. Given the proposed limitations on gifts to irrevocable trusts, establishing one this year might present a strategic move to optimize tax savings.

Optimizing Asset Sales

Another proposal would increase capital gains tax rates. Accordingly, some may consider selling appreciated assets such as stocks or a family business in 2021 to avoid higher capital gains tax rates in 2022 and beyond.

Your Trusted Estate Planning Guide for Wealth Preservation

Wealth preservation can be intricate, particularly with evolving laws and regulations. We are here to provide assistance and guidance as you navigate these changes, ensuring that your estate planning aligns with any potential shifts that the years ahead may bring. If you have questions or require clarity on estate planning tips or strategies, contact us today.

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