What’s at Stake?So, why is estate planning so critical at this moment? Biden has proposed that the estate and gift tax exemption essentially be cut in half. Currently, the exclusion is $11.7 million, meaning that if your estate is under that amount, you won’t owe the estate and gift tax and anything over that amount will be taxed at 40 percent. If the new proposal is passed, the exemption would be lowered to $5 million with the tax being implemented on all deaths and transfers.
What Can Be Done to Protect Your Assets?Estate planning is a key part of asset protection as there are quite a few ways to legally reduce your estate and income taxes. A great tax advisor will take the time to understand you, your business, and your relationship with your family to create an effective tax strategy. What many people don’t realize is that your family can play a large role in the tax strategy as assets can be passed to children prior to death, which can eliminate taxes.
Why Start Now?Creating a strategic estate plan that reduces the impact of Biden’s new proposal will take time. Rather than working on your tax plan and estate plan separately, it’s extremely important to combine the two as one heavily influences the other.
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