One of the most important things a person can do in their life is to create an estate plan for themselves. This is because it allows them to have a plan in place for their cherished assets when their life is over. While this is important for anyone, it is especially important for individuals who have assets of high net worth. This ensures that these assets are protected for the future. The process of creating an estate plan can prove to be complex for a person to handle on their own, which is why it is beneficial to enlist the help of a California estate planning attorney as guidance during this time.
Can a High Net Worth Minimize Estate Taxes?
It is important to know that estate plans are taxed. Wealth transfer taxes can include estate taxes, generation-skipping taxes, and gift taxes. There is also a federal tax that is placed on estate plans. This is 40% of what they are measuring with up to $5.6 million as tax-exempt. This means that the first $5.6 million is exempt from being taxed. However, there is then a 40% tax on the estate after the fact. This is placed on both gift taxes and the estate tax. Generation-skipping transfer taxes do not begin until the assets within the trust are distributed to a child or great-grandchild.
Planning for Incapacitation
Unfortunately, there are many people who find themselves in a situation of being incapacitated at some point throughout their life. This can cause them to be unable to take care of themselves, their work, finances, and personal affairs. It is because of this that it is important to plan for possible incapacitation early on in life so that you are prepared in the event that it does happen. There are many ways this can be done, including the following:
- Appointing a Durable Power of Attorney to manage the assets and a Healthcare Power of Attorney to make medical decisions
- Creating a will to set guidelines for possible life or death treatment
- Establishing guardianship for children under the age of 18
Can I Avoid Probate?
When an individual has a high net worth, they can benefit from having a living trust in place. A living trust can avoid going through probate since it is not in the creator’s name. When considering what trust to create, a revocable trust is also beneficial as it can be amended or revoked at any moment.
Contact our Firm
Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most.Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.