Tax And Estate PlanningNo less than $10 trillion worth of real and personal properties (in terms of estates that would be left behind by decedents) are up for grabs in the United States 20 years from now. What is now sure though is whether or not the owners of this wealth have started diligent tax and estate planning. Sans proper wills and estate planning, these trillions will most likely go to the IRS. If this is an unacceptable scenario then estate owners should start collaborating with an estate planning attorney who will help them do proper tax and estate planning the earliest possible time. With a legally permissible gift and estate planning, landed families are assured that most of their investments will go to the legal heirs, subject to the stipulation of taxation laws. Estate owners should understand the concept of how their properties will be processed after their deaths. Among the most common methods of transferring properties to the heirs are the following: 1. Through a will-A document which specifies how the property is to be divided among the heirs at the death of the testator. Of course, it will not automatically go to their sons and daughters as well as other family members without a proper probate. 2. Living Trusts-This is a revocable document which is resorted to by estate owners who want to distribute their properties while they are still alive and without the necessity of probate. In the absence of a will, the properties of the decedent will be distributed in accordance with the existing State laws. This means the estate is heavily taxed and the properties would not be distributed according to the wishes of the decedent. A probate determines the validity of the will left by the testator. The existence of a will means the testator has properly planned for the distribution of his estate after his death. Proper will planning is expected to result to: · Elimination of the costs of probate · Reduction or even elimination of estate taxes · Minimizes gift taxes · Proper division of wealth among the decedent's family Estates are taxed upon the transfer of the properties upon the death of the decedent. In most cases, most of the properties are monetized to pay for such taxes. To avoid this, the owner of the estate should carefully plan the distribution of his estate with the least possible taxes to be paid to the government. However, Congress may just come to the rescue of those who rue the day when their hard work would all be for naught. Estate owners can now leave more tax-free estate to their heirs, albeit gradually. The tax-free amount that can be left to heirs is now subject to the following schedule: · Up to $2 million for the period 2006-2008 · Up to $3.5 million for 2009 Estate taxes are scheduled to be repealed by 2010 but no one say for sure considering the ever-changing minds of politicians. But careful planning will one again go into the picture in increasing the value of the estate that would be left behind. There are plenty of good estate planning services that you can use to help you do this successfully and give you good estate planning advice . |