When you hear the term millionaire, chances are good that your thoughts immediately go to business tycoons, famous actors, professional athletes and even so-called reality TV celebrities living in large houses, driving luxury cars and making extravagant purchases. In other words, a lifestyle that is different in a million ways from your own.
While this certainly understandable, it’s important for people — particularly older adults — to understand that despite their firmly entrenched place in the middle class, they might actually be considered millionaires.
As difficult as this may be for you to believe, consider more than just the money currently sitting in your checking and savings accounts.
Indeed, when you add up things like a home that has increased greatly in value over the years, desirable vacation property, an ownership stake in a private business interests, furniture, cars, collectibles, life insurance policies and, of course, retirement accounts, you may find that you’re actually a multimillionaire.
This, of course, matters from an estate planning perspective as the current federal estate tax exemption currently sits at $5.43 million, meaning any assets amounts above this threshold will be taxed at a rather steep 40 percent rate.
What all of this serves to underscore is that even though you may have taken the initiative to execute a simple will many years ago, this document may no longer reflect your financial reality and, more significantly, the best tax minimization strategies.
Accordingly, those people in this position may want to seriously consider sitting down with an experienced legal professional to revisit and, if necessary, revise their estate plan to ensure that they are able to preserve and pass on their assets according to their exact wishes.