People in Texas may be surprised to learn how quickly their estate can add up to the $1 million estate tax exemption that may kick back into gear at the beginning of 2013. Adding the family home, investments, life insurance and other assets can take many individuals in our state to the $1 million mark and beyond. This is one reason that estate planning can benefit many, if not most, individuals.
Estate planning in Texas has many different aims. One of the important usual goals is to minimize estate taxes for a person's heirs. As many readers may be aware, the estate tax exemption is set to go down to $1 million in 2012 if Congress does not act to change that fact. Even if it does, there are many ways that a person in our state can create an estate plan that helps decrease the impact of estate taxes after death.
Trusts are a common way to achieve this goal. There are many different types of trusts that can be used, depending upon the size of the estate, the individual's appetite for giving while alive and for allowing a trust to own assets. Many people also take advantage of the ability to give as much as $13,000 to an heir each year without paying gift tax on that amount.
Estate planning can be complicated for some individuals. In addition, there are a plethora of tools available to assist people who hope to achieve their goals for their assets even after death. A full understanding of all available estate planning devices may benefit an individual seeking to limit taxes while both using income and leaving wealth to heirs.
Source: Fox Business, "Plan Your Estate Like Romney to Beat Taxes," Judy Martel, Oct. 25, 2012