Estate Planning Strategies to Help Keep Family Money

Planning ahead can save your family money and stress.

6/6/2017 8:50:00 AM
Estate Planning Strategies to Help Keep Family Money

Estate planning isn’t just for the super wealthy; everyone can benefit from seriously considering how their assets will be passed down to their family. These general strategies can help you start thinking about ways to keep more money within your family.

According to the U.S. Internal Revenue Service (IRS), estate tax is calculated by accounting for the fair market value of everything a person owns or has interests in at the time of death. It is important to note that the fair market value can be quite different from what you paid for an item or what the value was at the time of purchase, and because the size of an estate is one of the key factors in determining how it is regulated, it is a great idea to start your estate planning process by taking stock of the current fair market value of your assets. Once you are knowledgeable about the current size of your estate, in the eyes of the IRS, you will be better able to determine what steps you may need to take to ensure that your estate passes on in the manner you wish it.
“Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return,” the IRS website says.
For 2017, filing an estate tax return is required for estates that have combined gross assets and prior taxable gifts exceeding $5,490,000. If your estate is on the cusp of exceeding that amount, you may want to decrease the sum by making gifts to your family. The annual exclusion limit for the gift tax in 2017 (which is set for each donee receiving a gift) is $14,000. So you could give each of your children $14,000 without incurring taxes. The limit for spouses who are giving away property that is jointly owned is $28,000. You can see frequently asked questions about the gift tax at
In addition to gifting away your estate to ensure that the proper person receives the money and that your estate is not so large that it triggers an estate tax, making Roth IRA conversions can also be helpful for keeping money in the family.
“A big surprise for many people is that their 401(k)s and IRAs are subject to income taxes if the beneficiary is not a spouse,” says the Dickson Law Blog, presented by the Illinois-based Law Offices of Dickson, Francissen & Bartz, LLP. “This can greatly reduce the amount of money your beneficiary receives. You can avoid that tax bill by gradually converting your accounts over a period of years to Roth accounts that have tax-free distributions.”
There are many nuances to estate planning, and spending some time and money now to ensure that your estate is set up properly can save your family big money down the road. If you have any questions about your estate, don’t hesitate to contact your local North Shore Bank office to make an assessment of your current accounts and assets and to determine if your estate could be better managed.
Published by North Shore Bank. Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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