One of the things that can be very difficult to digest when you are planning for the inevitable is the fact that you will no longer be around to provide guidance for your loved ones. While it is true that proper estate planning can make things easier for your heirs financially, there are some things that money can’t buy and the wisdom of our elders is one of them. And on top of this that very money can sometimes do more harm than good depending on the individual involved and this is a consideration for many people as well.
People who are exposed to the federal estate tax need to take action in an effort to mitigate the damage, which can be quite significant considering the fact that the rate of the tax is 35% right now and it is scheduled to go up to 55% in 2013. A course of action that you may consider to this end would be to provide educational opportunities to people on your inheritance list while you are still alive.
There is a gift tax in place that carries the same rate as the estate tax, so you can’t just give gifts with impunity while you’re still alive to avoid the ravages of the estate tax. However, there are some exemptions and one of them allows you to pay the school tuition of students as a gift. As we all know the cost of higher education is considerable, so you could pave the way for the success of your loved ones while significantly reducing the taxable value of your estate by giving educational gifts.
Making this offer could also give you some insight into the mindsets of some of your younger heirs and this could influence your decisions when you are crafting your legacy. To learn more about how educational gifts could be a useful part of your inheritance plan, simply take a moment to arrange for a consultation with a licensed and experienced estate planning lawyer.
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.