When we hear the words “financial trends” we tend to think of how it can affect the stock market or our investment portfolios. Most people are not thinking about how it can affect their estate plan. If fact, most people are not thinking of their estate plan when it comes to immediate events considering their estate plan. As an estate planning attorney, it is our goal and responsibility to maximize the assets that are passed on to the heirs. Just like everything else, financial and estate planning trends are constantly changing. Let’s focus on some trends in estate planning that are good to keep in mind.
Federal estate tax planning will no longer be the focus for most, state estate and inheritance taxes will be in the limelight. The exemption can be as low as $1 million and state estate tax rates each 16%. For an estate that is valued at $10 million, they may be responsible for as much as $1.44 million.
The state where the owner of the estate’s primary residence is controls the bulk of the tax. However, it can get complicated while calculating state estate and inheritance taxes when families own properties in several states. This is common because many people retire to Florida for our taxes. Florida does not currently have a separate state death tax. If a decedent’s estate plan includes their primary residence in Florida and their vacation homes in Massachusetts and Connecticut, then they are responsible for the taxes due to Massachusetts and Connecticut because they owned property in those states.
The state that the decedent lived in primarily will claim estate taxes on tangible personal property and real estate property. In addition to that, it may collect the taxes for intangible assets too. This can include investments and stocks in business, regardless of their location. Determining the primary residence and domicile for state estate tax purposes is important. Speak to one of our experts at Arvanitakis Law Group to learn more about it.
As wealth increases and greater wealth passes down through generations avoiding federal estate taxes, it becomes easier to estate plan as a family and across generational lines. Insurance providers must learn to adapt. Change of pace from their old goal or “preserving wealth with as little government interference as possible” to a new goal of “capture, preserve, and manage the assets for the good of a family for generations to come.” Since this has a larger impact on the family and their future, it requires the family to sit down and speak candidly about their common goals and vision for the future.
Many of the women in this country who classify as baby boomers will be double inheritors. This means that likely they will inherit the wealth from their parents and from their spouse. Because of this, estate planners need to be aware of the difference between male and female baby boomer clients. The market is different and the estate planning can be different as well. Understanding how to best position yourself in the case of a double inheritance is important.
At Arvanitakis Law, we are well versed in estate planning trends, as well as financial trends. We understand the impact they can have on our client and their assets. If there are any financial trends you see and are concerned with the impact they might have on your estate plan, we are here to help. If you want to get started on an estate plan where you can reach out whenever you feel stuck or want to make adjustments, we are here to help. Bottom line: Arvanitakis Law Group is here to help! Call or contact us today and get started.