You have worked long and hard to build your estate.
Like most people you want your heirs and not the government to be the beneficiary of your estate.
The first objective of an estate plan is to ensure that your estate assets are distributed according to your wishes.
And secondly, to minimize the impact of taxation and settlement expenses so that the value of your estate is not unnecessarily eroded.
If you intend to keep your estate assets intact for the sole benefit of your heirs, you have to know how to protect these assets from the key elements that can take a big bite out of your estate.
For example, income taxes, capital gains tax, inheritance tax, probate fees, legal fees, executor's fees and other related expenses can cause a major shrinkage of your estate.
Applying basic estate and inheritance planning strategies will mitigate the negative impact of all these expenses and keep your estate assets intact for your heirs.
Without basic estate planning a lifetime of work could be destroyed upon your demise.
It would be a very sad experience for the surviving heirs to see a substantial shrinkage in the value of their inheritance - something that could have been avoided through basic estate planning.
Here is an example to illustrate what can happen without proper estate planning: Elvis Presley had an estate of $10,165,134.
After estate settlement costs of $7,374,635, Elvis' net estate was reduced to $2,790,799.
This translates to an unfortunate 73% shrinkage! Applying basic estate planning strategies would have left the full $10,165,134 intact for his beneficiaries.
This example is a powerful demonstration of the importance of having a well thought out and complete estate plan - for without it years of accumulated wealth can simply go down the drain.
Don't let this happen to your estate.
Don't let the government take a big bite out of your estate.
The income tax regulations state that upon the demise of a tax payer, apart from certain specific exemptions, there is a deemed disposition of all assets that the tax payer owns at the time of his/her death.
What this means is that the government will consider all of the eligible assets to have been sold at fair market value and as such the accrued gains will become assessable for taxation.
In addition, inheritance tax, probate fees and other taxes applicable in your jurisdiction can cause a further dent in your net estate value.
No matter what jurisdiction you live in, the government always gets its pound of flesh.
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