As our President would say, “Here is a great teaching moment”. The wealthy have a lot to teach us about estate planning. This article is a great read. Here are a few lessons you will learn:
Lesson 1: a Will is a private document when drafted but when you die, it becomes a public document available for all to see for all time.
Lesson 2: sometimes trust based estate planning is a much better vehicle for transferring your property to others particularly for asset protection and privacy.
Lesson 3: giving away money isn’t a bad thing. If you would rather a person or charity have more of your money than the government, appropriate gifting strategies can be utilized.
Lesson 4: Finally, here is a little Texas specific tax information for you to gnaw on: Texas does not impose independent inheritance taxes. The inheritance and generation-skipping transfer taxes imposed by the Texas Tax Code allow individuals to utilize tax credits available under federal tax law. This means your total tax burden does not increase as a result of these state taxes. The only effect of these state taxes is to divert money to the state that would otherwise be taxed by and paid to the federal government. This is why the Texas inheritance and generation-skipping transfer taxes are called “pick-up taxes”-they simply pick up money that would otherwise go the federal government. If an estate owes no federal estate taxes, it also does not owe any Texas inheritance tax.