Estate Planning is the process of arranging and positioning one's assets so that maximum distribution is effected at one's death. Check out estate planning Austin.
Depending upon the size of the estate and the state or jurisdiction of the individual's residence at the time of death, there can be taxes and expenses that will significantly cut into the estate assets and will minimize the net total that can be passed on to the beneficiaries of a person's estate.
There will also be administration costs that will need to be remitted to appointed administrators if that is indeed the case at the time of an individual's demise.
Estate Taxes can come from the Federal level, as well as the state level. At the Federal level, any taxes due must be paid in full within nine months of a person's death, and if proper provisions are not made, it may be necessary to liquidate hard assets in order to pay the taxes.
State estate taxes just add onto the burden of liquidity in the situation of paying taxes. Once again, depending upon the size of the estate, professionals who will be involved in helping to plan for the distribution of estate assets to beneficiaries are the attorney, the accountant, and the life insurance professional.
The proper use of trusts and life insurance can be a great strategy, for a well constructed trust/life insurance strategy can lesson taxes to a great degree, and provide the liquidity through the life insurance death benefit.
In large estate situations where there is a spouse, taxes can be mitigated to a great degree by setting up an A and a B trust where half of the estate is set up to be passed directly to the beneficiary through a trust, and the other half put into an irrevocable B trust. Thus the second half of the estate is not taxed until the beneficiary dies, cutting down on overall taxes when the first death occurs.
