The Challenges of Estate Planning

Lawyers, accountants, and insurance professionals seem to have one particular common aspect in relation to estate planning, which is that it can be a significantly challenging exercise! This especially applies to those parties with assets in the $5 million-plus range. One of the factors is that many of the people who seek their help and advice regarding trusts and wills, do not fall into the category of the overly wealthy. But going through probate, the legal process of transferring your wealth to your dependents will depend on the state that you live in. For California in 2017, any accumulation of assets that surpass the $150,000 value will have to go through probate, although the exemption is if the decedent is survived by a spouse.

Tax-Free Amounts

However, the facts associated with estate planning are that at the current rate married couples are enabled to transfer $5.43 million each, or a combined $10.86 million, tax-free, which is also known as the “exclusion” or “exemption. When the consideration for inflation, is taken into account, according to Bernstein Global Wealth Management, this sum should reach a total of $6.58 million in 2024 and $8.95 million by 2034. In order to reap the advantages offered by this option in estate planning, an executor for the estate of a deceased spouse must file an estate tax return, even when no tax is due, which is due within nine months following after death, but a six-month extension is permitted.

The factor of portability does not alter the fact that an unlimited amount may be given to a spouse, during life or by way of estate planning with the provision they’re a citizen of the United States; without tax being applicable.  Until the advent of portability becoming part of the law, without proper estate planning, upon the death of the remaining spouse, any sum over the exempted amount not donated to charity was subject to taxation. In plain language, the exemption provided to the first spouse was dropped. .

In exercising estate planning, it is now possible to depend on portability, which as of from 2015 now encompasses marital deduction and portability for same-sex married couples.

If you would like to start the long process of estate planning to make sure that your loved ones are taken care of, call Abrate & Olsen today on (916) 550 2688 or you can submit an online application form here.

Abrate & Olsen specialize in Estate Planning, Business Formation, Commercial Debt Collection, and Criminal Defense Law.