Kentucky residents who are thinking about crafting an estate plan are taking a big step toward sorting out and securing their financial situations. Oftentimes, that can make estate planning seem like a daunting task. When you are preparing to take this step, be sure to consider how the financial aspects of estate planning will impact your life and the lives of those who will receive your assets.
Estate planning and finances
A recent news article mentioned a few specific areas regarding finances that should be considered in the estate planning process – especially for older Americans who might just be getting into the process in their later years. For example, the article mentioned that it is important to consider how taxes might play a role in your estate plan. Will an estate tax come into play? What about gift taxes? Or, do you want to set up your estate plan to shield your assets as much as possible from tax implications? One way or another, taxes need to be considered when it comes to estate planning.
A trust is another important financial tool to consider as you think about your estate planning options. To put it simply, an irrevocable trust is established so that the assets that are transferred to the trust are there to stay: the trust becomes the owner, and the person who transfers the assets typically does not have the ability to go back on that decision. But, there may be huge tax advantages to establishing an irrevocable trust.
These are just a few examples of things to think about when it comes to your finances and estate planning. The bottom line is that your financial situation is unique and, obviously, that means that the estate plan you craft will need to suit your goals and needs. However, it is important to do your research and consider how your estate planning steps will impact your present and future financial situation.