Estate planning is the implementation of a plan to distribute assets and minimize costs to the highest degree possible at an individual's death. Each state in the United States may or may not have estate taxes, and most certainly the Federal government does, so the proper management of what estate taxes have to be paid is of prime importance. The usual professional that are employed in the Austin estate planning lawyer process are the estate planning attorney, a banking trust officer, a CPA and a life insurance professional.
Some property can be placed into a living trust, for example, so that the property will not have to pass through probate. This may or may not mitigate taxes, but it will reduce probate and administration costs.
The size of the estate, and the location where the deceased person resides has a lot to do with the planning process. Not only are taxes an item to be taken into consideration, but the aspect of administration costs also have to be dealt with.
Strategies such as gifting can be employed, since in many cases gifts can be given to beneficiaries such as children and grandchildren up to a certain amount with no tax, and if the gifts go over the free-tax amount, the tax is less in many instances, that the corresponding estate tax would be.
The judicious use of trusts and life insurance can further reduce potential taxes and costs, buy placing assets in non-taxable trusts and by providing liquidity with the life insurance. For example, if planning occurs soon enough, such as 3 years prior to the death of an individual, a irrevocable life insurance trust can be established where the trust buys life insurance which will be non taxable at an individual's death in order to provide liquidity to the estate.
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