Minnesota residents who have a high net worth should consider undergoing the process of estate planning. This process will help to ensure that your wealth is passed down to future generations without significant tax liabilities left for your beneficiaries. While estate planning may seem like an overwhelming process, having a strategy to approach it can help to make it feel much easier to go through.
Speak with your attorney about potential taxes
Estate planning comes with tax liabilities. While you might not be able to minimize all the taxes that will be paid from your assets or from your heirs, you can significantly reduce the amount that is owed. Some of the most common types of taxes that you’ll want to speak with your attorney about are gift taxes, estate taxes, generation-skipping taxes, transfer taxes, and income taxes.
Depending on how much wealth you have, you may actually be exempt from some of these taxes. For example, if a particular heir is getting less than $11.7 million, he or she is exempt from certain gift and estate taxes. A licensed attorney should be able to determine which taxes you’ll be naturally exempt from and which ones you’ll need to worry about.
Don’t forget about incapacitation planning
While you may not want to think about coming to a time in your life when you’re unable to make decisions about your financial situation or your medical treatment, it’s important that you prepare for that situation. By properly preparing, you can help to reduce the burden that is placed on your loved ones. It’s advisable that you set up powers of attorney for financial, legal, and medical matters.
If you’ve been considering undergoing estate planning, it’s likely that it’s time to finally take the plunge. Those who have a high net worth have more to lose. It’s best to bite the bullet and to use these tips to start the estate planning process and to ensure that your wealth is looked after in the future.
