Estate planning is a valuable tool for ensuring that a person's assets go to the proper heirs when he or she dies in New York. This is important for people of all income levels, but it is especially important for those who are wealthy. A couple of tips may help people with high-value assets to engage in prudent estate planning, which may include creating wills or setting up trusts.
One of the major causes of concern among wealthy individuals when it comes to estate planning is estate taxes. Whether estate taxes is an issue depends on the size of a person's estate. For the year 2015, a total of $5.43 million is exempt from the federal estate and gift tax.
Estates over $5.43 million might be subject to this tax at a whopping rate of 40 percent. There is another tax worth considering for those with wealth. This tax, known as the generation-skipping transfer tax, impacts transfers of people's wealth that are made to their grandchildren and other lower generations. For 2015, this tax exemption is also $5.43 million, with the top tax rate being 40 percent.
Estate planning in New York -- whether developing wills or creating trusts -- can be a complicated process, with one mistake potentially being quite costly. This is especially true for those who have many assets in multiple locations and/or who have assets with high price tags. An applied understanding of the law may help these individuals to create estate plans that protect their best interests as well as those of their intended beneficiaries in the long run.
Source: theworldlink.com, "Your Financial Health: Estate Planning: An Introduction", Matt Hoffman, Nov. 18, 2015