Many estate planners in Las Vegas don’t want too much trouble when they are determining how much their heirs should receive. Some might only have one child and few family members and friends, so it isn’t too difficult to balance what assets they inherit. Others might have multiple kids, grandchildren or stepchildren to complicate their situation.
Your first instinct might be to have your primary inheritors each earn the same amount. Many prefer this option to avoid postmortem controversies. However, choosing this isn’t quite so straightforward and you could risk losing significant assets in the process. You need to think about what options you have before you end up losing most of your property after your death.
How much do the heirs deserve?
After you create your initial estate plan, your documents likely won’t remain the same until your death. You can still change who helps you or how much your heirs will inherit before you become mentally incapacitated or dead.
Even though you are prepared for distributing your property after death, plenty can change within the following years to make you reconsider what amounts go to whom. Maybe one of your heirs committed an unspeakable crime and doesn’t deserve your property. Perhaps one of your children had a kid of their own and may need additional support. Even though you’re planning for the future, you need to keep the current circumstances in mind.
How much will taxes take away?
Even though you have your own taxes to worry about during your estate planning, you also need to keep in mind what taxes your inheritors currently have. Your inheritors likely have different careers with different tax rates. This means if you try to give them the same amount of money from a tax-deferred account such as an IRA, it won’t get divided equally. The one with the highest tax rate will get the least amount of assets.
To prevent this from happening, examine the amount of money in your tax-deferred and taxable accounts. If one heir has a significantly higher tax rate than the other, then they should get more from the taxable account since the taxes there are already annually paid on interests and dividends. Doing this not only makes it likelier that your heirs will actually get an equal amount, but it also helps ensure that you don’t lose most of your assets to taxes.
If you have difficulties with balancing out your asset division between all of your heirs, consider contacting an estate planning attorney to help you with the procedure. This is a tough and emotionally challenging process, so you may need all the help you can get.