It's almost mid-February, and perhaps one is sitting back and reflecting on a year that he or she believes is off to a good start in California. The often delayed task of estate planning has been completed. But has it? Has an estate plan actually been created or are there now estate documents where before there were none? And what is the difference?
Preparing one's estate can be a complicated process for many families here in California. An estate owner may have to decide what to do with a family home, certain heirlooms or the savings he or she has accumulated. Others may have to consider the process of how to manage passing down a family business or farm. A recent bill introduced in the senate may change the percentage of estate tax, and supporters claim that it will have a positive effect on those who want to leave their company to their children as part of the estate planning process.
January is coming to an end and it's a time when many people turn their attention from the festivities of the holiday season to the far more serious issue of tax season in California. While tax season and estate planning may not, at first glance, seem closely related, a change in the tax law impacts how one may structure one's estate plan. The estate tax exemption increased dramatically, which affects how much money can be gifted. The new exemption amount is $11.18 million per person.
People in California marry for love, begin families and build futures together. Estate planning is frequently part of that process. While divorce is not the anticipated outcome when a couple marries, a significant percentage of marriages do end in divorce. In that event, an estate plan will need to be revised.
Tis the season of giving in California and asking the perennial question of what gifts to get one's family for the holidays. As the baby boomer generation enters their 60s and 70s, they are seeing their own children become adults. Baby boomers have begun to share their wealth with their children and grandchildren. In so doing, they are concerned that the Millennial and GenX generations are not focused on estate planning.
Another year is coming to an end. With the beginning of 2019, aspects of the new tax law will come into play in California. Among these are new limits and parameters on estate and gift amounts. Both provide important tools for reducing estate taxes.
A wealthy family in California may be considering moves that can be taken to preserve family wealth from taxes with the advent of the new tax laws. There are mechanisms that can be used when reducing estate taxes. The current exemption of $11.18 million went into effect in 2018. This means that an estate valued at less than that is not subject to the federal estate tax.
The death of a spouse is perhaps one of the most difficult and trying times in a person's life in California. After the funeral, much of the focus may be on settling the late spouse's estate. While this is certainly very important and must be taken care of, an estate planning review on the part of the surviving spouse is also very important.
More and more people are recognizing the need to have an estate plan in place, even if they are at the beginning of their careers and adult lives in California. There are still almost 64 percent of Americans without a last will and testament. Estate planning can help ensure that a person's final wishes are carried out as he or she intends.
Estate planning can be a complex undertaking in California. In creating an estate plan, a person is determining who will inherit his or her accumulated assets after the person's death. Assets can include personal belongings, financial assets and real property, to name a few. Assets included in estate planning can also include frequent flier miles and loyalty rewards from credit cards.