5 Basic Areas of Asset Protection in Estate Planning

In this second in a series of blogs dealing with the family issues in estate planning, we take a step back and look at the over area of asset protection in estate planning. There are five basic areas: 1) tax planning, 2) the government’s rules on probate, 3) litigation, 4) long term care, and 5) family issues.

The two most commonly discussed and perhaps understood are a part of the first two:

  1. Federal estate tax planning
  2. Avoidance of probate

Federal estate tax planning deals with federal law on gifts to family members or other individuals during life or at death. Many people have heard you can give up to $10,000 per year to each of your kids. This number is adjusted for inflation and is currently at $15,000 in 2018. This limit only becomes important in larger estates as the federal estate tax exemption is over $11 million dollars this year for an individual and $22 million for a couple. Federal Estate Tax (FET) planning is simply a part of the broader area of tax planning in general, which in Nebraska includes Nebraska inheritance taxes and in every state, includes income tax planning.

Most people are more concerned with possible income tax issues, state inheritance or estate tax issues. An estate of $4 or $5 million is probably not at risk for the Federal Estate Tax, but may be subject to significant Nebraska inheritance taxes if the heirs are children and even more so, if they are nieces and nephews or other individuals. Income taxes may be a more complex issue if the assets are IRAs, 401ks or other tax deferred assets. Income taxes can also be critical in various types of predeath planning for highly appreciated assets such as farms and stock portfolios.

The issue of probate avoidance is a part of a larger issue of avoiding or changing/modifying the rules set up by the State of Nebraska or whichever state you currently reside in, regarding protecting you and your assets. Not only is the avoidance of probate generally a good thing, but so are the avoidance of conservatorships, guardianships, and other court processes.

At Carlson & Burnett, we have a team of attorneys who specialize in Long-Term care planning. We subscribe to the belief that “What’s in the family, should stay in the family!” Contact our attorneys at Carlson & Burnett to schedule a consultation. 

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