Studies that are conducted to measure the estate planning preparedness of American adults reach some disturbing conclusions. They consistently find that most American adults are going through life without all of the necessary estate planning documents.
Estate planning is a must for all responsible adults because you plan your estate for the benefit of your loved ones. If you don’t have a plan in place, you are putting your family members in a precarious position, and this is true even if you are a young adult.
In fact, if you are a young adult, you probably have people relying on you for ongoing support, so you should take this responsibility to heart. If you take the right steps when you devise your estate plan, you can make sure that income replacement is available to support your family if the unthinkable take place.
Estate planning can seem like a chore, so you may breathe a sigh of relief when you finally take action to implement a plan. You may store the documents and feel as though the job is done.
In fact, estate planning is not a one-time event. Estate planning is an ongoing process, because life is dynamic, and things do not stay the same. There are events that take place that impact the society as a whole that can be relevant, and changes within your own life can necessitate estate plan adjustments.
When we talk about societal changes that can impact everyone, taxation can enter the picture. There is a federal estate tax, and it carries a hefty 40 percent top rate at the present time. If your estate is going to be subject to taxation, you have to implement estate tax efficiency strategies.
In 2016, the estate tax credit or exclusion is $5.45 million. This is the amount that you can transfer free of taxation. However, this figure is not necessarily permanent. It is not scheduled to change, but the White House has proposed changes on a number of different occasions. These budget proposals have called for a $3.5 million exclusion.
If you were to face estate tax exposure because of a change in the exclusion amount, your estate plan would require an update.
This is one possibility, but you should regularly review your estate plan to make sure that it is always appropriate given your life situation. If you sit down and discuss your situation with an estate planning attorney every year or two, you can always be sure that your estate plan is up-to-date.
Our Firm Can Help
Our firm can help if you would like to review your existing estate plan with the benefit of professional guidance. We can also help if you would like to put an initial plan in place. To begin the process, register to attend an upcoming Living Trust Seminar through this page: Naples FL Estate Planning Attorneys.