There are many ways that our estates can be taxed.  Depending upon the make-up of our assets there are multiple taxes that could be assessed.  For retirement accounts such as IRAs, 401Ks, 403bs there are income taxes.  For assets that have appreciated in value, there are capital gains taxes.  And if you are fortunate to reside in some states, there can be a state inheritance estate taxes.

It is important to ensure that your advisors are keeping abreast of the changes in the tax code and keeping you informed of the things you can do to minimize your exposure to all of these taxes.  There are ways to provide your beneficiaries with additional tools to help them manage the tax burden that they may encounter.  Properly planning for your retirement assets can not only give them flexibility, but can also provide substantial opportunities for them to maximize and realize the true benefit and legacy of what you have left them.

For example, if you put your IRA into a Stand Alone IRA Trust, this asset will not only have asset protection but will also allow your beneficiaries the ability to stretch distributions over their life expectancies.   This can have dramatic effects on the required distributions and significantly reduce income taxes.  Additionally, by ensuring that your estate is administered properly, capital gains tax can also be eliminated or mitigated to a very significant degree, especially if you take advantage of community property issues that are only available in Arizona and the other community property states.

There is much more to planning than just saying who should get what, unless you do not care how much Uncle Sam and the governor takes from your estate.

Contributed by MH Phoenix, Cave Creek and Flagstaff Estate Planning Attorney, B. West Hunsaker.

 

About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.