Just about everyone should have an estate plan. However, these plans ideally are as unique as the people who create them. As such, they require different levels of estate planning guidance.
If your estate will include considerable and/or complex assets, you’ll want to work with an estate planning professional who has experience dealing with the types of assets you own. You’ll also want someone who can help you fulfill your goals, such as minimizing the taxes payable by both your estate and your loved ones.
Understanding the inheritance tax
Pennsylvania is among a handful of states with an inheritance tax. Therefore, it’s important to understand how that works so you can minimize or even eliminate the need for loved ones to pay taxes on what they inherit. Even beneficiaries who don’t live in Pennsylvania can be subject to the state inheritance tax if that’s where the asset is located.
Maybe you decide to give away some of your assets while you’re alive to minimize the total value of your estate for estate tax purposes. It’s important to understand how gift taxes work so that you don’t saddle loved ones with expected taxes that lessen the overall value of what you’ve given them.
Developing a succession plan for your business
If you own a small business that you envision continuing after you retire or when you’re no longer around, you want experienced guidance in developing a succession plan. We’ve addressed business succession plans here in the past. Even if you intend for it to be sold or liquidated, determining how the assets will be divided will be a crucial part of your estate planning.
Trusts and trustees
Likely, you’ll use one or more types of trusts in your estate plan. For example, revocable living trusts can be used to help your estate avoid probate, but they might not always be the best choice for estate planning in Pennsylvania. Conditional trusts let you pass on wealth, with restrictions, to loved ones who may not be able to responsibly handle it. Asset protection trusts can protect inherited wealth from creditors and divorce. Trusts are available for those who want to make charitable giving part of their legacy. Choosing the right trustees (or in cases where you’re the trustee while you’re alive, successor trustees) is key to helping ensure that the assets in these trusts are managed responsibly.
With sound guidance by legal professionals who have experience with creating and maintaining estate plans for high-value estates, you can help ensure that your loved ones and the causes you care about will benefit to the greatest possible extent from the wealth you’ve been able to cultivate.