The Finance Blogger

Estate Planning Probate

Estate Planning ProbateMany people are concerned about paying probate taxes on their estates. They would like to minimize the probate taxes. Many would like to leave as much money as possible to their estate and their heirs. They simply do not want to leave cash to the government. As a result, they will adopt many schemes to avoid paying this tax. Everyone should take steps to minimize the tax they pay legally. They should be thinking of this all of the time. You can be sure the tax department is thinking of ways to tax us more every day!

Estate Planning Probate – Government Tax

Governments levy a tax on the estates of people who have passed away under specific rules and guidelines. Depending on the size of the estate and the planning that is done ahead of time, probate tax can be reduced from thousands of dollars to hundreds of dollars. Makes sense to do estate planning for probate taxes.

There are legal methods to avoid probate taxes and to set up your estate in such a manner that the probate taxes are minimized. We will list a few here and then discuss several in a bit more detail. Regardless of what you read here or anywhere on the web, we urge readers to contact a lawyer and an income tax specialist to make sure that what you are doing is legal to start with and secondly is in your best interests as well. After all, you want to remain protected while you are still alive.

Estate Planning Probate – Reduce Taxes

Here are some of the things you can do to reduce or eliminate taxes:

Anything that is jointly held will automatically usually go to the remaining person. This can include cars, homes, investments, and personal items. Most couples will own their own homes jointly. As a result, there will be no probate tax generated when one of them passes away. Once the remaining spouse passes away, probate tax on the home for example will be generated. Unless you make the home in joint ownership with another person, usually a child.

Some people will go as far as transferring the asset to the child with the understanding that the asset will remain for the personal use of the parent. In most cases, there is nothing wrong with this, but every once in a while you hear about a child taking advantage of their parent and leaving them destitute. Talk to your lawyer and other family friends before you take this serious step.

Add a Child to Property Ownership

Adding a child as a joint owner appears to be a better solution since when the parent passes away the asset is automatically transferred to the child as specified by local laws. This also avoids probate tax and is a great way to conduct estate planning of probate taxes and minimize them. The danger here is if the same child has power of attorney and can make decisions on your behalf. Again discuss these issues with your lawyer and close advisers.

The laws vary a great deal in many countries. They all have various probate tax laws and while what we have discussed will usually work for many people in many countries, it is important to obtain legal advice regarding your rights as well as current probate tax laws in your country or state or province.

Minimizing probate tax is an important part of estate planning and we think that most people will want to at least look at this issue and make a decision regarding what they need to do to minimize probate taxes. Do not wait until it is too late. Your health may fail all of a sudden and some locations have laws in place that will include any transaction completed in the last two years of life as part of the estate for probate purposes.

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