Understanding Estate Taxes
28. Six-step action plan
If you're wondering where to begin, follow our six-step action plan:
1. Inventory your assets and debts. Find out the current net value of your estate and see how much your estate would have to pay in estate taxes, if any.
2. Write down your objectives. These would include reducing estate taxes and whom you want to have your assets after you die.
3. Select a qualified professional to help. Find someone with whom you will be comfortable sharing this information, who can answer your questions and can help you decide which strategies will be best for you.
4. Have the legal documents prepared.
5. Put your plan into action. Some assets will go into your living trust and others may go directly into a separate irrevocable trust. You may also decide to make annual tax-free gifts to your children.
6. Review your plan every year or so and make changes when necessary. Remember, the plan you put into place today is based on your current situation and tax laws. These things change, and so your plan will need to change, too.