It is important for everyone to take care of their wealth. People work hard to provide for their families and nobody wants to surrender more than they must. Sadly, taxes and death are two parts of life that are simply unavoidable. In some cases, they work in concert with one another. This is where the idea of the estate, also called the death tax, comes into the picture. It is critical for everyone to make sure they work with an estate planning attorney Denver to make sure they pass as much of their wealth down to their heirs as possible.
What Is the Estate Tax?
The goal of an estate plan is to help people prepare for what is going to happen to their wealth after they die. If people aren’t careful, the estate tax could end up taking half of what they own. The estate tax is a tax that is applied to people’s estates after they die. When someone dies, half of every dollar over a certain threshold is taxed at 50 percent. Clearly, this is a major tax that people would like to avoid. This is what makes an estate plan so important. There are tools that a trained attorney can use to help people limit the amount of tax people owe. It is important to note that the estate tax applies to everything that has value including property, bank accounts, investment accounts, and even jewelry.
Tools for Effective Estate Planning
There are a few parts to an estate plan that can help people ensure that as much of their wealth is passed down to their heirs as possible. First, an estate planning attorney may recommend that people actually start passing down their wealth before they die. By cutting down on the size of the estate before someone dies, they limit the size of the estate at the time of their death. Another tool that a legal professional might employ is called a trust. Trusts come in many shapes and forms. The goal of a trust is to protect assets by shifting their ownership to a temporary commodity with strict instructions on how its assets can be used. This can help people protect certain assets, including life insurance benefits.
Find the Right Lawyer
These are a few of the most important points that people should keep in mind when it comes to an estate plan. Avoid paying more taxes than is necessary.