Legacy Wealth Planning: Planning for Estate Taxes

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LEGACY WEALTH PLANNING

• Planning for Estate Taxes

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• A very important estate planning issue that
  affects legacy wealth is estate tax

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Currently, you can give a gift or bequeath up to
5.25 million in assets WITHOUT INCURRING ANY
TAXES
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This is known as a personal estate tax exemption
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If, however, your total assets exceed that sum,
you need a legacy plan that takes into
consideration your estate tax liability
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An effective estate planning attorney can take
steps to help you reduce the IMPACT OF ESTATE
TAXES
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Unlike some states, Arkansas does not impose an
additional estate tax
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Unlimited Marital Deduction
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• In addition to the personal estate tax exemption,
  many people are entitled to a marital deduction

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This allows married couples to transfer property
to each other, either during their lifetime or
at their death, without paying federal estate or
gift taxes
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When the gifting spouse dies, the value of the
property that passes to the surviving spouse will
be deducted from the gross estate of the deceased
spouse
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• This amount is unlimited

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The Benefit of Charitable Donations
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• The giving of charitable donations is not only
  rewarding, but it also provides its own tax
  advantages, as well

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To encourage philanthropy, the federal
government has created certain tax deductions for
donations to qualified charities
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This benefit can be put to use in LEGACY WEALTH
PLANNING
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There are some issues to be considered, however
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Whether you gift a specific dollar amount or a
set percentage to charity will obviously have an
impact on the amount of your assets your heirs
will ultimately inherit
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Revisit Your Estate Plan
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REVISIT YOUR PLAN if there are changes in the
value of your estate
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If your financial status has changed markedly
since you established your legacy wealth plan,
you most likely need to revisit your plan to see
if any changes need to be made
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If your will or estate plan distributes your
estate by percentages, then changes in value will
not have any effect
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If, however, you left specific amounts to your
named beneficiaries, an increase or decrease in
the value of your estate could have consequences
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• For example, if your estate plan donates 100,000
  to your favorite charity and the remainder to
  your heirs, a marked reduction in the value of
  your estate could very possibly mean your heirs
  will not get nearly as much as you intend

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• Also consider this scenario

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Also consider this scenario
You decided to give your two children different
assets with the same value
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For example, you leave your son a house worth
500,000 and your daughter stock also valued at
500,000
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If the value of either asset has increased or
decreased significantly, then the gifts to your
children will no longer be of equal value
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Therefore, it is important to update your estate
plan whenever the value of your assets has
changed
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• It is also important to consider what effect the
  change in value of your estate may have on your
  estate tax liability

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If you need help in creating your own legacy
plan, contact our firm to schedule a free
consultation
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Click to visit arkansas-estateplanning.com