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Estate planning tips for investors

On Behalf of | Oct 19, 2016 | Estate Planning |

Ohio investors might want to think about estate planning as a lifetime plan for wealth management and for educating their children and grandchildren about finances. Thinking about estate planning across a lifetime rather than simply at the end of one’s life allows for strategies such as gift giving to reduce the value of the estate. Another effective strategy may be using trusts to fund companies. This can be done as a family as a way of learning about investing. Trusts can also be set up to fund education or the purchase of a first home.

As of 2016, the federal estate and gift tax exemption is $5.45 million for individuals and $10.9 million for married couples. Gift giving before assets appreciate is one way to distribute wealth while staying under this lifetime limit. Charitable giving can also be done in a strategic way that maximizes the value of the gift while providing tax benefits to the donor.

It is important for investors to leave clear instructions for family members. Failing to provide account information could leave heirs paying higher taxes or high legal fees trying to work out the value of certain investments.

Trusts have several other advantages over wills as a way of passing down the majority of a person’s wealth. Unlike a will, a trust is private. Trusts also do not have to go through the probate process. This can be lengthy and expensive, and if a person has real estate in other states, the probate processes of those states must be followed. Some people may opt to use a will to designate the distribution of lower-value and sentimental items. A “pour-over” will can also place assets in a trust at the person’s death.