Estate planning is about accounting for your assets and then developing a succession plan for your estate. In Tennessee, your estate must be administered upon your death, so estate planning prepares your estate for the beneficiaries ready to receive it. Without the right plan in place, however, your assets, money and businesses get disbursed within a public court.
Estate planning accounts for all assets, which include investments like stocks, 401(k)s and gold. These assets acquire value over time but are also eligible for deferred taxes. Whether protecting your investment profits through capital gains or in an IRA account, the income your property generates can be legally sheltered from taxes.
Managing debt and other liabilities
Some of your assets can be used to pay off your debts. In a revocable trust, for example, the investment profits you generate can be withdrawn to build your estate. Calculating your debt, how you’ll pay it and your payment options calls for a full plan. In estate planning, tallying up your liabilities is how you eventually reduce or eliminate risk.
Foreseeing tax liability
The taxes you pay on your income, retirement accounts and overall estate are predetermined. In estate planning, your objective is to assess tax liability and reduce it if possible. Your tax responsibility is based on income subtracted from any major deductions. For the sake of a succession plan or retirement account, you can legally avoid increasing your taxable income.
Death is certainly a central reason why people in Texas resort to estate planning. Preparing your assets for a successor is important, but registering for deferred taxes protects your current lifestyle and estate. Your estate can produce wealth and protect it if it’s well-organized.