The federal estate tax does not kick in unless a person’s estate is worth more than $5,340,000. Most people do not have to worry too much about the federal estate tax, therefore, when they do their estate planning. However, some states have an inheritance or death tax that applies to estates of a far lower value. Texas currently does not have an inheritance or estate tax, but there is always a possibility of change, so that it is advisable to check with an estate attorney to find out of whether there is an inheritance tax in the state.
For married couples, with proper estate planning, the federal estate tax will not kick in for estates up to $10,680,000. Regardless of whether your estate would be subject to taxes, there are other vital concerns that militate in favor of estate planning. For example, in order to protect your assets and needs for future contingencies, you should make a durable power of attorney, a living will and health care proxies now.
The power of attorney will allow your designated agent or agents to sign your name to checks, banking documents, contracts and all other legal transactions that require your signature. The health care proxies allow your agent to speak to doctors and make decisions with respect to your health care. The living will provides your personal wishes and instructions with respect to being maintained on life-preserving machines.
Estate planning in Texas also allows you to designate your wishes as to how your assets will be distributed, both during life and after death. This is done by living trusts made during life and by your last will and testament, which is made now but kicks in upon death. In order to decide whether you want to use revocable living trusts during your lifetime, and whether you need to make a will for distribution after death, the pros and cons for your particular situation will be best learned in a confidential consultation with an estate planning attorney.
Source: citizensvoice.com, “IN THIS CORNER: Estate planning strategies not for just wealthy“, Christopher D. Ross, Dec. 14, 2014