Ventura and Santa Barbara estate planning lawyer

Estate Planning Strategies to Help You Preserve More Wealth for Your Loved Ones

Most people never have to worry about paying estate taxes. Only estates valued at $5.49 million or more ($10.98 million or more for couples) are subject to the federal estate tax.

However, even if your estate falls below that threshold, there are still numerous reasons why you may benefit from cohesive estate planning. It allows you to pass on your assets and property as you see fit, taking the guesswork out of the process of distributing your wealth once you pass away. It also gives you the ability to make contributions to charitable causes, if you so choose.

With this in mind, there are a few common estate planning strategies that will likely benefit you and your loved ones as you prepare for the future.

Creating a last will and testament

This is the most basic aspects of the estate planning process, and yet as many as two-thirds of Americans have not created a will to protect their wealth. Without one, your assets and property will be subject to the probate process, giving you little to no control over how they get distributed to your family members and friends.

Rather than leaving this process to intestate succession laws, work with an estate planning attorney to establish a will that reflects your wishes.

Establishing beneficiaries on accounts and policies

You cannot provide heirs with all of the assets you own through a will. If you have accounts or policies such as retirement funds or life insurance, you must name beneficiaries to receive payouts upon your passing.

Unfortunately, many people simply neglect to name a beneficiary. Others might have gotten divorced and never updated the beneficiary, which means a former spouse could still receive a significant amount of money.

Using trusts to your advantage

Trusts are useful estate planning tools if you have a large estate or are concerned that your heirs will not use their inheritances responsibly. There are many different types of trusts, and you will likely need to appoint a trustee who is responsible for distributing the trust’s assets after your passing.

Irrevocable trusts have the most tax benefits, as any assets placed inside them are not subject to taxation. This is because those assets technically no longer belong to you—they belong to the trust instead.

You may also add stipulations for how beneficiaries may use the money in the trust. Some trusts allow you to distribute the assets while you are still alive. It’s worth noting that trusts do have to pay taxes on income earned from any interest or dividends.

Switching to a Roth IRA

If you have a traditional individual retirement account (IRA), consider converting it to a Roth IRA. These have tax-free distributions, which means there are significantly fewer limitations on your ability to take out and distribute the funds.

Giving gifts on an annual basis

The Internal Revenue Service allows you to make gifts of up to $14,000 each to as many individuals as you like in a single year, without taxation. Thus, you may either make financial gifts to individuals in your family or provide tax-deductible gifts to charities. Either (or both) helps you pass down more money tax-free, with the added benefit of seeing the good that money does.

These are just a few of the strategies that may allow you to properly plan for the years ahead and protect both your loved ones and your hard-earned wealth. Meet with a skilled estate planning lawyer to learn more about the various tools and options available.  

Schedule Your Consultation with Our Experienced California Estate Planning Attorneys

Bartlett & Herrington, P.C. is a top estate planning law firm in Carpinteria, California. Our attorneys help families set up living trusts, wills, powers of attorney, healthcare directives in Santa BarbaraVentura and Montecito. We also serve clients in probateelder lawretirement planningasset protection and Veterans Affairs (VA) aid and attendance planning.

Schedule a consultation with our experienced attorneys today by calling (805) 576-7693.

 

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