Death is a part of life that most people do not like to spend much time thinking about, but it is something that must be planned for if you want to limit the disruption that your family will experience when you pass away. Sadly, there are many myths circulating this unpleasant part of life, and as a result, there is a good chance that there are two estate planning myths you may have heard during your life.
Myth: You Only Need To Include Physical Items In The Estate Plan
Many people assume that an estate plan should only include the physical assets of the estate. While these may be the most visible parts of any estate, there are numerous other items that must be addressed. For example, you may have financial securities that need to be addressed. This can include stocks, retirement accounts or any other financial assets that you may have.
In addition to these assets, you may also need to address any final wishes that you may have. Often, this includes funeral arrangements and your wishes for how the assets will be utilized. Interestingly, it is possible for you to establish criteria that must be to obtain the inheritance, and this can help ensure that your wealth does not end up squandered.
Myth: Taxes Do Not Factor In Matters Of Inheritance
There are likely many items that you wish to leave to your loved ones, but you may not realize that this can cause extreme tax problems if the items are very valuable. Sadly, this may force your loved one to have to sell these items in order to pay the tax burden on them. Luckily, there is a simple way that you help offset these financial complications.
Many individuals do not realize that life insurance policies are tax-free. As a result, you can use this rule to offset the tax burden of your loved ones. Your estate attorney will be able to help you calculate the taxes that will be owed, and you can simply take out a life insurance policy that will pay the recipients the amount of taxes they will owe on the inheritance.
Most people want to ensure that their passing does not cause unnecessary strife for their loved ones. However, estate planning can seem like a very complicated area of law, and as a result, some people may believe some myths that can cause problems when the inheritance is distributed. By understanding what should be covered in the estate plan and how to offset the taxes your recipients will need to pay, you can help ensure your passing does not cause any more stress than is necessary. Talk to your attorney, such as Robert Stone Attorney at Law, for more information.Share