New Laws Affecting Estate Planning

pass assets along to heirs

An interesting article appeared in USA Today that discusses estate plans and the new laws that have recently been implemented. The write-up discusses the various aspects of figuring out how best to pass assets along to heirs and future generations. The main thrust of the USA Today article relates to choosing the wisest path for those interested in efficient estate planning that takes full advantage of continuously changing tax laws. Because tax laws can be somewhat of a moving target it is always best to work with experienced NY estate planning advisor.

A Clear And Concise Plan Laid Out

For example, beneficiary designations in certain types of life insurance products and various types of retirement plans offer advantages when it comes to avoiding probate court. As most people already know, probate court involves legal proceedings where the court is involved in distributing the assets of an estate when no will or estate planning has been put into place. Most would agree that avoiding probate is usually the best option. A principal should always have a clear and concise plan laid out well in advance to ensure that heirs and future generations enjoy the wealth and assets that should rightfully be theirs.

Trustee In Charge Of The Actual Trust

The USA Today article also discusses something known as a revocable grantor trust. This is considered a tool that will help people avoid the complexities of probate court. In this instance, the principal as the grantor or the person making a gift can convey assets back to one's self as a trustee in charge of the actual trust. This is a key strategy because as a trustee, a principal has control over the assets during their entire lifetime. Being that this type of trust is revocable simply means that the principal can revoke or change the trust as necessary.

Less Likely Chance That Probate Court Will Be Required

Another benefit of a revocable grantor trust is that when the principal dies, the successor as trustee can easily and conveniently convey proceeds to any beneficiaries. When a principal places assets in a trust, there is greater control and use of those assets and there is a far less likely chance that probate court will be required. Another key consideration when it comes to trusts is that a principal should always attempt to fund a trust with as many assets as is sensibly possible. This provides for a greater level of overall protection.

Similar Types Of Investment Vehicles

It is also important to note that IRAs or Individual Retirement Accounts and other similar types of investment vehicles are typically not placed in a trust. What is important to note in this recent article is that the IRS has recently eased the rules with regard to portability. This simply means that a surviving spouse’s trust is now able to use any part of the deceased partner’s exclusion with regard to the current existing exclusion amount (which is $5.3 million per person.) Recent changes in laws have in fact prompted many people to re-examine their existing trusts in order to fund a single trust.

Tens Of Millions Of Dollars

Finally, it is always recommended to work closely with an experienced New York estate-planning advisor when making these types of changes. Constant changes and modifications to both federal and state tax laws can quickly and surprisingly out date many currently held estate documents. That is why it is so important to stay abreast of changes as they occur in the industry. Perhaps most crucial of all is to avoid procrastination when it comes to estate planning. A lack of planning or poor planning can ultimately cost a family or a legacy tens of millions of dollars. Providing security for future generations can be as simple as staying proactive and always planning ahead.

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