One of the main goals behind estate planning is avoiding probate litigation and often even probate itself. This is true for New York residents as well as others living across the United States. However, there are often other issues that estate planning must also address. One such issue involves how the issue of estate taxes is handled within the probate scheme.
The late owner of the Oakland Raiders, Al Davis, seems to have understood how proper estate planning can protect assets that might otherwise be lost to estate taxes. The current tax for those who pass away this year caps out at 35 percent for those at the highest level. For the Davis family, this would have amounted to an estimated estate tax bill of at least $175 million, which caused many people to speculate the family would have to sell the team. However, the team is not for sale, at least not at the present time. It is not entirely clear how Davis managed to plan his estate, but he must have done something right.
One thing we do know is that federal estate tax levels are topped off at 35 percent for this year and next. Then, they go up to 55 percent. This means that planning for the future is best accomplished now, before the higher rates go into effect.
There are a variety of ways to protect estate assets. Purchasing large life insurance policies that are also sheltered by special types of trusts is just one way to preserve assets. Charitable planning is another important estate planning measure. As it stands now, there are options available, but it may not stay that way.
Many people do not realize that the estate tax is applicable for assets such as home values, a 401k, life insurance and other assets. In other words, some people are worth more than they may think. As such, estate planning is most likely worthwhile to avoid the expense of probate and probate litigation, which may result in disappointed heirs.
New York residents may well benefit from consulting a probate attorney in Long Island. The lawyer can answer important questions and suggest the best options available for each individual. The goal is to achieve an all-inclusive estate plan destined to maximize asset protection and minimize estate taxes and other costly expenses.
Source: The Forbes, "Will Estate Taxes Force Al Davis' Family to Sell The Oakland Raiders?," Danielle and Andy Mayoras, Oct. 10, 2011