Your wealth is a result of a life of honest hard work, careful saving, and smart decision-making. Now, as you age, you need to start thinking about what you want the fruits of your labor to mean to your family and other loved ones when you are gone.
After all, you won’t be here forever — and if you want your wealth to be protected and passed on to the right people, then you need to take care to prepare and protect your legacy.
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Wills, trusts, and more
Hopefully, you already have a will. But if you don’t have one yet, then now is the time to put one together. It is possible to write your own will, but this isn’t advisable for larger estates. You don’t want the wealth that you’ve worked so hard to earn to become a burden and a divisive issue within your family, so make sure that you work with an attorney to lay out clear plans and expectations about what goes where and how the funds should be used and allocated.
An attorney who specializes in wills and estates can help you draw up the perfect will. You’ll have to think very carefully about who your executors will be — it’s a big responsibility. If you’re setting up a trust, then your trustees must be chosen very carefully as well. You won’t be around to make sure that everyone is behaving properly, so choose wisely to preserve the legacy you’ve worked your whole life to earn.
The structure of your estate will vary depending on the size of your estate, your needs, and your goals. One of your major goals should be ensuring that the maximum amount of wealth possible is passed to your heirs. The unfortunate truth is that this amount can vary: depending on the efficiency of your estate’s structure, some can be wasted or paid in taxes.
There is a federal estate tax, and some states have their own estate taxes or inheritance taxes. Pennsylvania is among them. Pennsylvania has an inheritance tax, which is exactly what it sounds like — it is paid by your heirs.
Fortunately, you don’t have to figure out how to minimize your tax burden all by yourself. That’s what your attorney is for, so be sure to choose a local attorney who is extremely familiar with Pennsylvania law and who specializes in wills, estates, and taxes.
Talking with your heirs
Few people really enjoy talking about death. But, once you’ve made some decisions and prepared some key things for your eventual passing, it’s very important that you sit your heirs and loved ones down for a frank discussion of what they should expect. It won’t be the most pleasant conversation in the world, but it’s a very important one.
Talking about your end-of-life plans will ensure that nobody is caught off-guard by your decisions. And discussing your will and your plans for your estate will help ensure that everyone cooperates in preserving your legacy. After all, preserving your legacy is not just about what you do before you pass.
It’s also about the decisions your heirs make, which could determine whether and how much Pennsylvania inheritance tax they pay. In some cases, for instance, your heirs may want to quickly sell your home after they inherit it. The structure of your trust, if you have one, the responsibilities of the trustees, and other key details must be discussed.
Once you’ve had this important conversation, you can rest easy. You should update your heirs and loved ones if you decide to change any important plans, but otherwise, you can enjoy your golden years knowing that you’ve protected your legacy for generations to come.