Estate Planning Awareness Week comes during the final quarter of the year, just before the New Year shift known as the “fiscal cliff.” What is the fiscal cliff? This buzz word encompasses the impending year-end financial perfect storm. As the calendar flips over to 2013, multiple economic changes will take place at the same time. Automatic spending cuts, expiring tax cuts, and new taxes are slated to happen simultaneously, leaving Americans hanging on a fiscal cliff.
This makes it a more important time than ever before for individuals to prepare a comprehensive estate plan. After the drop off the fiscal cliff, capital gains, dividends and estate tax cuts will expire. Preparing a sound estate and financial plan or updating your existing plan before the looming economic shift will ensure the most effective protection of your assets. Investments should be reviewed to allocate funds to accounts that will maximize value over time, depending on your needs.
An estate planning attorney can advise you on the best possible strategies for year-end estate planning. Proper planning will reduce the impact of the coming tax increases. The top Income tax rates will rise to over 39% and capital gains taxes will rise to 20%. With an appropriately prepared estate plan, you will rest assured your beneficiaries won’t bear excessive tax liabilities.
The tax changes could translate into huge payments: heirs may pay as much 55% in estate taxes for amounts inherited over $1 million. How can you ensure your life-long investments are passed along effectively without major reduction by the impending tax increases? Discuss different options like an irrevocable trust with an estate planning attorney during Estate Planning Awareness Week.
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