Estate-planning tips for Alabama families

Alabama families need to make sure that their affairs are in order, regardless of the size of the estate, to ensure that the right people inherit your assets. Developing a sound estate plan early can help minimize taxes for your beneficiaries down the road. The following pieces of advice can help anyone; even those who have already begun to prepare their estate plan.

• Clearly Declare Who Gets What

If you fail to properly draft a will, the laws that govern your domicile determine who inherits your assets. This includes nonfinancial assets, like the little sentimental items that you might care greatly about. The pieces of jewelry or paintings that family members have had their eyes on for years might be thrown into turmoil without a clearly laid out will.

• Choose How Your Money Should Be Spent

If you intend to have some of your assets allocated to cover specific expenses, you might need to create a special trust that includes such specific provisions. You may want to designate specific amounts to cover college and special needs expenses for certain individuals. By doing so, you ensure that the trustee of the trust would be legally bound to spend the money in the way you desire.

• Minimize Estate and Income Taxes

If you think that your beneficiaries will likely be left owing estate or income tax on the amounts they inherit then you might want to employ tax-efficient strategies from the beginning of the process. For instance, you can leave taxable assets to charities if while leaving your tax-free assets, such as Roth retirement accounts, life insurance and after-tax savings, to your other beneficiaries. You can also help to minimize your taxable estate by giving money to your beneficiaries while you are alive. So long as the gift remains under $13,000 for each recipient it would be tax-free.

• Offset Taxes with Insurance

Your beneficiaries might face losing a substantial amount of the assets they inherit to estate and income taxes. This can be offset with the proceeds from life insurance. For example, if your estate planner looked ahead and forecasted that one beneficiary stands to owe $500,000 in estate tax, you can go ahead and purchase a life insurance plan for that exact amount and name the affected party as the beneficiary. Since life-insurance proceeds paid to your beneficiaries are tax-free, the entire $500,000 would be available to pay the taxes owed.

• Work with a skilled Alabama Estate Planning Attorney

An experienced Huntsville estate planning attorney can help with the designing and creation of trusts and wills, whether complicated or commonplace. A good attorney can also ensure that your estate plan complies with cumbersome federal and state legal requirements. The local expertise of the estate planning attorneys at Martinson & Beason, P.C. will help you craft a sound plan to secure your family’s future.

Source: “5 Estate Planning Tips,” by Denise Appleby, published at