Estate Planning Basics

Although estate planning can be a complex task, a well-informed plan can make a big difference in what is left for your loved ones.

Before you begin to take action on your estate plan, it’s important to understand the key topics that may arise as you address your specific needs.

Working with an attorney or tax advisor

It’s important to work with an attorney and possibly a tax advisor on your estate plan. The attorney’s role will include guiding you through the creation of fundamental estate planning documents. These may include a will, health care proxy, and durable power of attorney. The tax advisor can help you with any associated tax issues.

You’ll make the decisions, but your attorney and tax advisor can help you think through and understand the sometimes complex implications of each option. They will also help you communicate your wishes clearly, avoid mistakes, minimize taxes, and adjust your plans as time goes by or your circumstances change.

An attorney or tax advisor can be well worth the cost—significant savings can result from thorough, informed planning.

Maximizing what you leave behind

This will be a key theme throughout your estate planning efforts. It's important to get legal or tax advice and think through how each asset will pass to your beneficiaries, as well as your estate as a whole. The best options may vary by the asset type, asset size, your age, or many other factors.

You'll want to be thoroughly informed on what actions you can take or plan now to make sure as little as possible is lost to taxes, court fees, and other expenses.

Estate, inheritance, and gift taxes

A big part of maximizing what you leave behind is minimizing taxes. Federal taxes on gifts and estates can be among the highest assessed on any financial transaction. In addition, some states levy their own estate or inheritance taxes.

More about taxes

Get forms, tools, resources, and other information you need for tax planning and filing.

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Both estate and gift taxes usually have exemption limits, meaning you can give up to a certain amount without incurring tax. Many people use the gift tax exemption to transfer assets while they are still living, as part of their strategy to maximize what their beneficiaries receive.

Estate and inheritance taxes usually are based on the value of the taxable estate and are paid before the assets are distributed to the beneficiaries.

Next topic

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