How Your Assets Will Be Divided Up

If you read our previous blog post, you know how to figure out how much money you will have to pass on after calculating how much you will need to live on.

This post, based on a follow-up article in Forbes, talks about how the assets that you have will be divided up.

The story points out that the decision is not yours entirely. There is a legally determined order of payments out of a person’s taxable assets. Assets in forms other than personal taxable accounts, such as through corporations, trusts and IRAs, have different requirements.

You really need an estate planning professional if your estate contains such entities.

But your starting point is the total amount of your assets. First, look at your liabilities – any debts, final income taxes, funeral expenses and the costs of administering your estate.

The next set of deductions from a taxable estate is gifts to charity.

Then, the IRS collects taxes if any are due. As of 2014, only estates worth more than $5.34 million owe federal taxes.

Anything left over after all that can be left to your heirs. Those left to your spouse are exempt from transfer taxes.

If you have questions about estate planning, feel free to call us for a consultation at (626) 696-3145.

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