Not matter how much wealth you have been able to accumulate during your life, it is vital to have a functioning estate plan. Indeed, estate planning is not just about distributing money to your heirs. Estate planning is about making life easier on your heirs when you are gone, and it is also about making life easier on your caretakers in the event that you become incapacitated.
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When it comes to planning their estates, most Texas residents want to know how they can limit the tax burdens that their heirs might face. Estate tax planning is very important for wealthy individuals to consider -- especially individuals who have estates close to or in excess of $5.43 million. Texas residents with estates this large will want to know how federal estate taxes will apply to them and develop strategies to limit these tax liabilities.
Now that we have made our way into 2015, estate planners around the United States can celebrate the ever-growing size of their federal estate tax exemptions. As of 2015, the estates of those who die with estates under $5.43 million in value will not be subject to federal estate tax. There is even more to celebrate: many states are coming on board with higher estate tax exemptions as well. Both eventualities impact estate tax planning in Texas.
Thinking about the day our lives will come to an end is frightening, and most Texas residents put it off for as long as possible. What that means is that they put off estate planning too. In fact, as unbelievable as it may sound, over half of Americans who have children do not have a fully planned estate on file.
One of the mot difficult aspects of estate planning is trying to figure out who will get what. It is likely one of the biggest reasons why Texas residents tend to put off completing the task. Indeed, a lot of consideration is needed on an emotional and financial level, and also in terms of family dynamics, when trying to figure out how one's estate should be distributed. Fortunately, wills, trusts and various asset distribution plans can be designed in a way to avoid the risk of problems further on down the line.
A common component of the estate planning process is to try to limit an individual’s estate tax exposure. Estate tax planning strategies are typically employed by those of higher wealth and income brackets, depending on the state in which the person resides. Some states, like Texas for example, do not have estate taxes. Also, as of 2014, the federal estate tax does not go into effect unless an estate exceeds $5.34 million in value.
Common sense dictates that estate planning is best done sooner rather than later. No matter one's age, financial situation or health status, getting one's ducks in a row in this regard can bring an enormous amount of peace of mind. That said, each Texas resident will require specific estate planning strategies catered to his or her situation and needs.