Estate planning, though oftentimes seen as strictly for preparing for one’s death, is also a wealth builder. Your current assets can be put into an estate that has tax protections, for example. In some cases, the capital gains you earn on your investments never get taxed in California. Organizing your estate with the expectation of wealth is more profitable than just planning for death.
Prepare for taxes
Estate planning to build wealth is simplified once your tax strategy is out of the way. Your estate must be honest, complying with state laws. Nothing guarantees that you’ll never pay taxes, but you can reduce the possibility with the help of a financial advisor. Your estate incurs taxes when withdrawals are made. The estate tax also affects beneficiaries.
Organize the proper trust
A trust builds wealth by first keeping assets private and uncontestable. To be irrevocable in this manner is to be protected against claims for your assets. The beneficiaries you assign in a trust are the only entities who receive your assets. This advantage gives you the chance to choose qualified successors for your estate. The privacy of these relationships ensures that the assets you disburse aren’t publicly disclosed. Other benefits of trusts include:
- Probate protection
- Tax avoidance
- Capital gains
- Privatized assets
Use the right insurance
Life insurance has value before and after annuities are paid. Your options can be public or kept private, which is based on a will or trust. In a will, your mention of insurance may not override the directives you directly have with an insurer. Estate owners often look for term life insurance for a steady but temporary substitute to cash. If you die, the money from insurance may go toward paying your funeral fees. Doing so relieves your family from the burden.
Being vocal about your estate
Every estate owner must think about how to communicate with his or her beneficiaries. Being vocal about your estate helps others prepare and reduces your chance of being contested.