For people who have a very high net worth, estate planning should be considered of utmost importance. Everyone wants their loved ones to live a comfortable and peaceful life when they pass away. Estate planning comes up as a vital solution in this regard. The sooner you make a plan, the more benefits and peace of mind you will get.
If you do not do proper estate planning, all the wealth you have earned throughout your life can end up in the wrong hands. Therefore, you must take measures to ensure your beneficiaries get what they deserve and what you intend to give them. You can learn more about estate planning by consulting with an attorney.
Estate planning strategies for rich people
Save by gifting.
Gifting is always considered a kind gesture, and it also allows you to transfer your wealth to your beneficiaries. It reduces the amount that you have to pay in estate taxes. You can gift your wealth to your loved ones in the form of an asset or trust to your beneficiaries.
Through life insurance.
Life insurance can be permanent or temporary. Maintaining proper life insurance is critical in estate planning. Your family can use an insurance policy to support themselves financially after your death without having to worry about paying estate taxes. One advantage of life insurance is that when the funds are paid out to the family after the owner’s passing, they are exempted from taxes.
Look for a 529 plan.
Reducing the size of your estate during your lifetime is one of the most important strategies for estate planning. The lesser the estate property, the less it is subjected to taxes after you pass away.
Adopting a 529 plan will give you the advantage over higher estate and gift tax exemptions. You can save your money for educational expenses without incurring any extra payable tax. A 529 can be withdrawn at any time, whenever you want, without worrying about any extra taxes. However, the funds should only be used for educational purposes.
Revisit your plan regularly.
Estate planning is a long-term process and requires regular checking. Big changes in your life, such as shifting to a different state, can have a significant impact on your estate plan. You need to change your existing estate plan and adjust the changes accordingly.
Even your choice of beneficiaries can change over time according to various life situations, like marriage, divorce, death, etc. It is important to regularly check up on your trustees and beneficiaries in order to keep up with the plan.
Hire an estate planning lawyer today.