There are certain misconceptions floating around with regard to estate planning that should be debunked. When you act, or fail to act, due to bad or inaccurate information you can often put yourself and your family in a bad situation. With this in mind let’s take a look at a few of the myths that are out there.
One of them regards the estate tax. Some people are under the impression that they don’t have to worry about it because they’re not rich and this is a tax that is only imposed on wealthy people. The fact is that the estate tax exclusion is going to be reduced to just $1 million at the end of next year if the laws stay the same as they are right now. The rate of the tax is going to go up to 55% from the current 35% rate.
There are over eight million households in the United States with assets that exceed $1 million. These days you really don’t have to be truly wealthy to have accumulated assets of this magnitude, especially when you consider the value of your home and any inheritances that you and your spouse may have received over the course of your lifetimes.
Another myth that is circulating regards how easy it is to plan your estate on your own. There is no one-size-fits-all estate planning document because every family is different, and every jurisdiction is different. You can certainly fill out and sign a blank generic document that you found online, but are you sure that it will be legally binding after your death?
And lastly we would like to address the idea that retaining an estate planning attorney is not affordable. In reality, investments are all about value and you’ll invariably gain more than you invest in the long run when work with an estate planning attorney to make preparations for the future.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.