Anyone in California who has been involved in planning an estate (or administering one) likely understands the challenges that arise regarding estate taxes. Laws governing such matters are constantly changing, making it a good idea to keep an estate plan updated to reflect current laws. Estate planning is a highly customizable process and many people have found ways to minimize the tax burdens their loved ones will bear when the time comes to administer their estates.
State laws vary; therefore, it is always best to seek clarification before executing a plan. Federal laws may also affect one’s estate plan. Many people have found that making annual gifts to people (up to the allowed amount) is a viable means of reducing assets quickly so as to lessen the amount left taxable in an estate.
Some estate owners may also have the option of transferring taxable property to heirs without an estate tax. Generally speaking, most people seek ways to maximize asset values while avoiding heavy taxation so as to lessen financial burdens placed upon their heirs. In this state, assets that exceed certain values may be taxed as much as 40 percent.
To begin the estate planning process in California, and to make sure one has a clear understanding of all tax codes and laws that apply, a meeting with an estate attorney should be requested. Doing so often helps simplify and expedite the process. An attorney can also help an estate owner who has an existing plan make changes or updates as needed.
Source: fool.com, “Estate Planning in 2017: Here’s What You Need to Know“, Dan Caplinger, Jan. 22, 2017