While you may already have your will and other aspects of your estate in place, you may not know how to reduce the cost of estate planning. Where should you start?
Kiplinger explores strategies for navigating the financial aspects of estate planning. Make sure that your loved ones do not absorb unnecessary costs upon your death.
Start gift-giving now
Rather than make it so that your heirs inherit your assets after you die, start giving assets while still alive. Giving gifts lets you experience the joy of your loved ones receiving and using their inheritance. Another reason to distribute assets sooner rather than later is to reduce the chances of your assets going through probate.
Do you have adult children, benefactors or heirs whom you fear may mismanage the money you leave them? Consider giving them a portion of their inheritance as an early gift. You may leave them instructions for how you want them to use the money. This gives you an idea of how the person handles large sums of cash and whether to consider adjusting the rest of the individual’s inheritance.
Think about federal and state estate taxes
How much should you expect to pay in federal and Texas estate taxes? Stay current on estate tax laws and how they may influence your estate. If you make gifts from your estate, find out how much you may give before you must report your generosity to the IRS.
Do not forget about capital gains
The value of some of your assets may appreciate over the years, such as real estate property and investments. Talk with a financial adviser about when and how to give away appreciating assets.
Take control of your estate with proper knowledge. Being well-informed serves you well during every step of the estate-planning process.