To say that there are a lot of misconceptions being branded around regarding estate planning would be an understatement. This is one area of the law which is grossly misunderstood, for the simple reason that differences between federal and state limits can wreak havoc with one’s finances.

This is one of the reasons why the likes of Steve Pybrum are so in-demand; having a solid knowledge of the laws can make life a whole lot easier later down the line. In short, making sure that you have a plan in place is absolutely paramount and if you don’t, there’s every chance that costly surprises are just around the corner.

Of course, we’re not here to tailor a specific estate plan for your individual needs – unfortunately, everyone’s will be slightly different. Something we can do is offer a touch of advice though, with the following suggestions relevant to most people who are looking to put the appropriate plans into place.

Make sure your will is the first-stop

This might sound like one of the simplest pieces of advice you can execute, but the number of people who don’t have a will is quite frankly staggering. To put this into perspective, some studies have revealed that almost two-thirds of the country have not drawn one up yet – and you can draw your own conclusions from this.

If you’re not armed with a will, it’s up to a probate court to divide all of your assets. While your assets might not be divided as you would have liked, the other problem is that this can prompt even more costs for your beneficiaries. Suffice to say, the costs will dwarf the initial fee required for a will.

Gifts now can save your loved ones in the future

This might not be a suggestion that’s appropriate for everyone, but the concept of gifting can save a huge amount of money on some occasions. The IRS has stated that you are able to ‘gift’ others $14,000 every year, without any tax implications when you do your own taxes. If your whole estate is bordering on the taxable line, it’s steps like this which can bring its value down and also preserve the final bill.

A slightly alternative way is to turn to charity. Particularly if you set up a donor-advised fund, you can make immediate tax deductions for any money that’s deposited.

Trusts can be ideal for sizeable estates

If you do happen to have a sizeable estate, and there’s no question that you are over the taxable threshold, a trust could be your best option. In truth, this is one of the most complicated areas of tax and there are umpteen ways to set them up. It’s worth mentioning that on a lot of occasions the assets will no longer belong to you, but at the same time the money won’t be hit with estate taxes. You’ll generally have to appoint a trustee, to control the money, and the only form of tax relates to any income you receive from dividends and interest.