Wealthy Colorado clients have to watch for changes to tax laws and inheritance rules to protect their assets. If you have considerable wealth, it pays to stay up to date with the latest trends in estate planning.
Pay attention to state and federal taxes
There is a lot of talk about changes to the federal tax structure that governs inheritances. However, remember that states also collect estate taxes. If you only pay attention to the federal level, the local estate taxes can decimate your estate.
Consider a life insurance trust
Protect your children’s legacies with estate planning steps that give them the cash necessary for any estate taxes. It prevents your children from having to liquidate hard assets that you want to keep in the family.
Be generous to family members and other heirs
You do not have to wait until your demise to give cash and other assets to your loved ones. There is the gift tax exclusion that lets you give away $15,000 each year per person. It is a perfect way of funding college educations for grandchildren and others. Right now, there is also the estate tax exemption, which currently sits at $11.7 million per person.
Should you become a resident elsewhere?
Some wealthy individuals think ahead and establish residency in states without a death tax. While you still face the federal taxes, it gets the state agency off your back. However, establishing residence is a commitment that means actually moving for at least half a year annually to the new state.
Because estate planning is a confusing subject when there are liquid and hard assets, it is in your best interest to discuss your plans with an attorney. A legal professional may help guide your decisions.