Plan for Your Future Heir

Since the 2001 federal estate tax laws went into effect, the dollar amount an individual can bequeath will change each year until 2010. Understanding the federal and NYS estate tax laws and their implications is essential to smart estate and succession advance planning.

If you have concerns about minimizing any estate taxes you may face, then you must plan for your heirs and estate.

As it exists, the federal estate tax law is complicated; add to that the complexities of the New York state tax laws, and individuals are faced with many decisions. The biggest wrinkle: New York State has its own estate tax and their unified tax has a one million dollar threshold. But client advance planning can be done to
mitigate this.

No matter what the value of the estate, clients need to know from a planning perspective that there is an uncertainty about the amount of estate tax.

The important message here is that if you are concerned about minimizing any estate taxes you may face, you must do some
advance planning.

Whether you are a commercial client who owns a business or an individual who plans to bequeath your estate to family, meeting with advisors will help you make the right decisions for your personal circumstances.

Clients often ask, “What can I do to avoid estate tax?” There is no simple answer to that question since the plan depends upon the assets you hold.

For example, if you own a closely held business, you may have a shareholder’s agreement, therefore, personal advice and assistance is necessary for
estate planning.

Or, to avoid estate taxes as husband and wife, one possible solution for delaying payment of the estate tax is to leave money to the surviving spouse. However, in some situations you may want to put certain assets in a trust account where direct access is not readily available.

Consider the following:

  •     Understanding Federal and New York State estate tax laws is critical to estate planning
  •     Depending on your assets, you may face other tax issues related to your estate
  •     If the estate is not structured correctly, your heirs may pay unnecessary taxes
  •     Poor planning wastes the unified credit, so it is important to be structured

Meeting with advisors regularly helps to understand the law and the best possible solutions for your trusts and estate planning purposes. Both Karen Schaefer at 324.5718, and Tim Muck at 324.5727, in Trusts and Estates are available to discuss and devise a plan suitable for your personal and business needs.