Estate planning may bring the image of a nice family, well dressed, posed in front of a big mansion and expensive car with a chauffeur. While these types of people are definitely the types that require a great estate plan to save money when the head of household is no longer around, that doesn’t mean you and your family don’t need one also.

Where will your wealth go?estate planning importance d&m accounting

To determine what happens to your wealth after your passing, you need to have an estate plan. Otherwise the law will decide where it’s distributed.

In sickness and health…

Your estate will also determine what happens to you when you’re in a state that you’re unable to make decisions, including medical decisions. Address the treatments you would or would not want in extreme situations, and talk about these with your doctor and family as well.

Thinking of your family

Especially if you have dependents. A big part of estate planning is addressing what happens if you become unable to make decisions. If something drastic happened tomorrow, would your bills get paid on time? Would your family be taken care of in this time you’re not around, whether for a brief period or permanently?

This is a morbid thing to think about, but preparing for the worst will give you and your loved ones peace of mind now and less things to worry about if something unfortunate were to happen down the road.

 

So, whether or not you’re living in a state that has an estate or inheritance tax, a plan is necessary. Hope for the best and prepare for the worst.

D&M Accounting can help you prepare so you and your family have one less stress in the back of your minds.

2017 Federal and State Estate Tax Rates

The federal government and some states have a monetary threshold where an estate and/or inheritance tax kicks in.

Current for 2017, the federal estate tax exemption is $5.49 million per individual, and $10.98 million for married couples. These numbers rise each year with inflation.

The states which impose an estate and/or inheritance tax include:

State                                  Min. Amount       Percentage

  • Connecticut              $2 million               7.2-12% estate
  • Delaware                  $5.49 million          0.8-16% estate
  • Hawaii                       $5.49 million          10-15.7% estate
  • Illinois                        $4 million               0.8-16% estate
  • Iowa                                                            0-15% inheritance
  • Kentucky                                                    0-16% inheritance
  • Maine                       $5.49 million           8-12% estate
  • Massachusetts        $1 million                0.8-16% estate
  • Maryland                  $3 million               16% estate inheritance 0-10%

State                                Min. Amount       Percentage

  • Minnesota              $1.8 million            10-16% estate
  • Nebraska                                                 1-18% inheritance
  • New Jersey             $2 million                0.8-16% estate  inheritance 0-16%
  • New York                $4.187 million        3.06-16% estate
  • Oregon                    $1 million               10-16% estate
  • Pennsylvania                                           0-15% inheritance
  • Rhode Island         $1.515 million         0.8-16% estate
  • Washington           $2.129 million        10-20% estate
  • Washington DC     $2 million                8-16% estate
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