Incorporating Life and Wealth Tax Planning into your Estate Plan

In Estate Planning by Sarah E. Martello

What are Life and Wealth Plans?

Although many “estate plans” merely include a will, I encourage my clients to incorporate a life and wealth plan into their estate plan.  Because estate planning already requires an intensive analysis of your financial bottom-line, it creates a unique occasion to address life and wealth issues without incurring a significant amount of additional cost.  Life planning will assist you in making concessions for both your current and future current and future needs, responsibilities, and health related     directives.    By introducing a wealth plan into your current savings objective, you can maximize your present and future net worth while avoiding commonly faced investment risks.  Often, wealth planning will incorporate advantageous tax planning to reduce—or even eliminate—present and future state and federal tax liability.  Your wealth plan will ultimately provide for the disposition of your assets in a final will and testament.  This will allow you to maximize your current enjoyment from your assets while augmenting the legacy you pass to your loved ones–all while relieving them of the burden of any probate proceedings.

Flexible Options to Fit Your Budget and Planning Objectives

Although sophisticated estate and tax planning is often expensive, it does not have to be.  Because I understand the importance of such planning and the implications associated without, I strive to provide exceptional planning services – at an affordable, more accessible price.

I think it’s important to educate the client on the legal and practical implications associated with their life and wealth planning decisions.  I will not try to sell you services you do not need.  However, I will provide you candid advice so we can work towards tailoring a plan that accomplishes your needs and objectives—nothing more, nothing less.

Out-of-Date and Out-of-State

I realize how important it is to stay up to date with the constantly changing tax laws so I can keep my clients informed and help them plan accordingly.   This is particularly important considering a significant portion of the Federal tax laws relating to estate and gift taxes are set to expire in the next year.  As a result, there’s a good chance that new tax legislation will be implemented which could hinder the effectiveness of your current estate plan.

An out-of-state estate plan can also present a problem.  In Florida, a person is presumed to have died a resident if they “lived” in FL, 12 consecutive months within the 48 months prior to death.  The 12 month rule even applies to those absent from FL for a portion of this time and to those with citizenship privileges—or obligations—in another state (i.e. voting rights, paid taxes).  Even if you are not classified as a citizen, FL will likely still have jurisdiction to tax your property remaining in state at death.

An incentive to citizenship includes the legal protections FL provides to its residents.  For example, FL offers a generous homestead benefit, protecting you and your family’s interest in certain real property.   The lack of proper planning may lead to excessive taxes, unneeded waste and diminishing of resources—something we would all like to avoid!

Many clients may offset the expense of life and wealth planning through a federal tax deduction allowed for such planning.

To help you become acquainted with some of the Although a variety of planning techniques exist, they typically include a final will and   testament, inter vivos gifts and testamentary trusts, life insurance policies, and health care documents (a durable power of attorney, health care surrogate designation, and a living will).