You may not have given much thought to your estate plan, especially with the lifetime estate tax now at a record high of $12.06m per person. History has shown that this amount fluctuates, so ongoing planning is necessary. The estate tax will be reduced to $5 million in a few short years, adjusted for inflation. This is a topic that you should keep on your radar.
We have found that is the best way to plan an estate for clients with different net worths. is the easiest method. You can gift anyone $16,000 ($32,000 for a married couple) in 2022 and $17,000 (in 2023) without needing to file gift forms or reduce the amount that you are able to leave to your heirs. The IRS has been increasing this amount over the years to keep up with inflation. Why is it important? This can be a very effective strategy if you want to transfer wealth slowly. You may want to save money for your child’s college or for a house down payment. You could achieve your goal by using this method.
Remember that the $12,06 million lifetime estate does not include the annual gift amount. The lifetime estate is only reduced when the annual gift amount has been exceeded.
You might start thinking about your family’s future goals as 2022 draws to a close. You should always have an updated estate plan. (See tips below). One of these strategies may be to give money to people you intend to help in the future. As you make your goals for the new year, it’s a good time to update or complete your estate plan. A will, medical directives and power of attorneys can be very valuable for your family. You could leave your estate to the state if you don’t prioritize this.
- Set up your estate plan with a local lawyer. Ask your CPA or advisor if they can recommend someone if you do not have one. Legal Zoom, an online service, is not recommended.
- Talk about your family goals, and decide what you want to leave behind or give away. Consider investing in 529 plans for education or custodial accounts. This could be beneficial to your family down the line.
- Make sure that someone, such as your executor or a close family member you trust, has a copy.
