There is an old Kenny Rogers song that gives out some free advice: “Don’t ever count your money, when you’re sittin’ at the table.” This strategy may be good for gamblers, but it is something to avoid when it comes to estate planning.
The estate tax can do a lot of damage to your financial legacy. Not everyone is exposed to the tax, but if you are you must work with an experienced estate planning attorney to take steps that provide estate tax efficiency.
How is tax responsibility evaluated? It all comes down to your taxable net worth. If the overall value of your estate exceeds the estate tax exclusion amount that is in place at the time of your death the tax kicks in. Should your resources fall within the exemption amount your heirs would not be required to pay any death taxes.
Maintaining a net worth statement is the way to stay abreast of your situation in relation to the estate tax exclusion at all times.
If you work with a good estate planning attorney at some point in time and it is determined that your estate is within the exemption amount you should not view this assessment as something that is permanent. The laws change all the time, and the estate tax exclusion could be reduced. And, your own financial situation could improve significantly over the years.
When you always know what your net worth is and you keep in touch with your estate planning attorney by scheduling regular consultations you will always know if your estate is still exempt from the estate tax. If it is not, your attorney will be at the ready to assist you as you implement tried-and-true tax efficiency strategies.