Many people are excited about the elimination of the federal estate tax with the proposed new tax reform plan put forth by the White House. This plan, if it passes, will greatly simplify tax processes for people across the board, but especially when it comes to dealing with estate planning services. There will be fewer complex strategies required to deal with a potential IRS bill after someone passes on.
This does not mean, however, that people should forego estate planning altogether. There are many reasons why estate plans matter, and inheritance tax is really at the bottom of the list. Check out these three important reasons you need estate planning even without the burden of an inheritance tax hanging over your head.
Reasons You Need Estate Planning
When it comes to reasons you need estate planning, inheritance tax, for the vast majority of people, doesn’t come into play at all. Only those estates worth a significant amount of money are currently even subject to the death tax to begin with. Estate planning actually allows you to put your assets where you want them, it allows you to plan for other kinds of taxes, and your state may have estate taxes that will hit you anyway.
Put Your Assets Where You Want Them
This is the single most important reason why you want to have a solid estate plan. This enables you to ensure that all of your final wishes are seen to. You can be sure that your assets are divided amongst your heirs and loved ones exactly the way you want. Without an estate plan, the probate courts will step in, and they’ll make the decisions, which may not always be best for the people involved.
Even worse, probate courts cost money, and those costs can be significant, which means even if you avoid federal death taxes, your estate could pay more in court fees than those taxes would’ve hit anyway. An estate plan can minimize the involvement of probate courts.
Other Kinds of Taxes
Don’t assume that just because the federal death tax goes away, that frees families of all tax burdens. The tradeoff under the current plan is that your heirs may be subject to a capital gains tax based on the value of the assets they inherit. This can actually end up putting heirs in danger of an increased tax burden The right estate plan can still protect you from such a burden.
State Estate Taxes
Just because the federal tax isn’t going away, it’s still possible your heirs will face a state death tax, and even if they’re not currently subject to one, the state government can implement one at any time. It’s not worth the risk, in the end—an estate plan is vital to avoiding the financial burden your heirs face when you pass on.
Estate Planning Attorneys
These are just a few important reasons you need estate planning. If you’re looking to avoid the undue financial burden on your heirs and ensure that your assets go where you want them to go, a good estate planning attorney can help. If you’re in Cuyahoga County, call Stano Law for help today.