Multiple Variables Make Estate Planning Essential
Many of us work diligently to earn an honest living to provide for our families not only throughout our lives, but also long after we have passed on. In reality, this means much more than amassing enough wealth to leave an inheritance to loved ones. Since laws in states such as New York heavily tax the estates of the deceased, consulting with an estate planner is crucial, even when death seems decades away.
Estate taxes may mean a smaller pie
While the federal estate tax threshold is high enough not to affect most people, New York and 18 other states in the U.S. still have state estate taxes that may take a significant chunk of what is left behind. In New York, up to one million dollars is exempt from the estate tax, but after that the funds are taxed at a rate of up to 16 percent. Up to $5.25 million is exempt from federal estate tax for those who pass away in 2013, $5.34 million in 2014 — with a top federal estate tax rate of 40%. New Yorkers can, however, rejoice in the fact that unlike New Jersey and a handful of other states, the Empire State does not have a specific inheritance tax, which forces heirs to pony up a portion of their windfalls.
Estate planning means looking at the big picture
If such taxes offend your sensibilities, you’re not alone. In the last few years, state after state has eliminated or weakened death taxes. With that being said, estate planning is much more than simply avoiding taxes. In essence it involves devising the means through which your legacy will continue after you are gone. Determinations such as who makes end-of-life decisions and who becomes the guardian of children all fall under the umbrella of comprehensive estate planning.
Without setting up an effective, enforceable estate plan, your wishes may be open to attacks from many angles. In addition to forking over large chunks of money to the government, failing to devise an estate plan may mean having your life’s work distributed in a way that runs contrary to your wishes.
Anyone who has worked hard to succeed should consult with a qualified New York attorney to develop a comprehensive estate plan to protect their legacy and hard work for years to come. Contact Peter G. Gray for a consultation.