Effective comprehensive estate planning generally requires the advice and services of a licensed attorney with the experience to recognize the benefits or problems that may arise around individual circumstances. Fortunately, addressing the legal aspects of estate planning need not be overly stressful or expensive. The more difficult challenges in formulating an estate plan tend to be choices that need to be made on a purely personal basis. One of those difficult choices can be the selection of who to nominate as the executor of your estate.
Many Kent business owners may hope and expect that ownership and operation of the family business will be passed on to children after retirement or in the event of death. While in some cases business interests will pass smoothly to children under default probate laws, a number of different factors can lead to unexpected and undesirable results. Business owners who take the time to establish a solid succession plan can enjoy greater certainty about the future of their businesses and potentially take advantage of opportunities to reduce inheritance tax liabilities at the same time.
Kent readers may be aware that the current $5 million federal estate tax exemption is slated to expire at the end of this year. The impending end of the hefty exemption has spurred an upswing in the popularity of a little-known form of life insurance that can play an important role in a comprehensive estate plan.
As readers in the Seattle area may know, the current gift tax exemption stands to expire at the end of the year, and so far, Congress has shown no particular interest in acting to maintain the current exemption level. Estate planning professionals have been urging people to consider their options for taking advantage of the exemption before the end of the year, but business owners need to act sooner than others to make sure not to miss out on potential inheritance tax advantages while they last.
Readers in the Seattle area who anticipate inheriting a loved one's individual retirement account may want to take note of some frequently disregarded considerations that can have serious inheritance tax consequences. As long as taxpaying beneficiaries act quickly and avoid some common mistakes, certain opportunities are available to increase the long-term value of an inherited IRA and avoid double taxation.
Residents in the Seattle area who are concerned with matters of estate planning may have been following recent news reports regarding inherited individual retirement accounts. Max Baucus, the U.S. Senate Finance Committee Chairman, has proposed tougher requirements on IRA transfers to beneficiaries, although he said he would hold back for now on an effort to change the laws regarding inheritance.