While most everyone has their sights set on Halloween -- readying their costumes, purchasing candy and putting the final touches on decorations -- it's nevertheless very important not to lose sight of a very important event this month.
October 19 to 25 is National Estate Planning Awareness Week, an event started by the National Association of Estate Planners & Councils back in 2008 to help draw attention to the fact that many Americans either don't have an estate plan in place or haven't revisited them in many years. Indeed, statistics show that an astounding 56 percent of Americans have failed to updated their estate plans.
In keeping with this theme, experts have comprised a few tips for those either on the fence about creating an estate plan or those who are putting off updating their estate plan to consider:
- Married parties who are U.S. citizens have an unlimited deduction as far as federal estate taxes are concerned, meaning they can leave any amount to their spouse and suffer no federal tax hit.
- If your estate has a taxable value that exceeds the amount of the federal estate tax exemption -- $5.43 million per person in 2015 -- you can help bring your potential tax hit down by making bequests to IRS-approved charities.
- Unlimited amounts of money can be given to cover medical bills and school expenses (with the exception of room and board) for relatives without reducing your federal estate tax exemption provided these payments go directly to providers or academic institutions.
- An irrevocable life insurance trust enables you to pass the proceeds from a life insurance policy to beneficiaries free of any federal estate taxes.
What all of this serves to underscore is that carefully executed estate planning, while inherently complex, can also prove to be incredibly beneficial. To learn more, please consider speaking with an experienced legal professional.