When someone takes steps to make sure that the entire estate in Phoenix is handed over to inheritors in an orderly manner, that’s called Phoenix estate planning. It can be anything from a simple will to a complicated wealth transfer device. The intention is to reduce the estate tax that needs to be paid for the transfer.
In addition to wills, the devices used include trusts, powers of attorney and gifts, among others. The choice usually depends on how much wealth and assets there are, and what (if any) is the purpose or intended use of the wealth by the recipient. The process is complicated further due to constantly changing federal and state tax laws that govern transfer of wealth.
Wills are the easiest, as far as setup is concerned. But the real problems – probate costs and delays, pop up after the estate holder has passed away. These problems can be avoided by using a Trust, but there is a common tendency to assume that trusts are only for really wealthy people.
Wills are essential in any case. But a trust on top of that gives the estate holder the ability to maintain some control over when and how the wealth is transferred and used by recipients. The legally sound and unchallengeable nature of a trust helps avoid all the costs, delay and hassle of a probate court.
Gifts are also a popular device for wealth transfer sans tax. A single individual can gift upto $13,000 per year (married couples can gift $26,000) to each recipient without any tax burden. Unlimited tax free amounts can be paid out medical and educational purposes, as long as the funds are paid directly to the institution and not the recipient.
The federal estate tax laws are currently in a state of flux. The amount that can be passed on to heirs without being hit with a big tax keeps changing on a yearly basis due to new legislation from Congress. It is best to contact an estate tax consultant to figure out the exact tax liability and the best way to reduce it.
Obtain highly reliable and qualified estate planning trust services now.
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