By Bill Burmeister- Michigan Church Extension Fund
You may be worth more than you think. At least that’s what many people discover when they take the time to add up their assets. Retirement funds have grown; real estate values have increased; investments have multiplied; insurance policies have expanded; things of value have accumulated over the years.
First, have you checked your financial worth lately? Chances are you’ll be pleasantly surprised.
Second, if you find yourself above a certain level, another surprise may await you the high estate taxes due after you die.
And, let’s say that part of your estate includes a qualified retirement fund and the named beneficiary is someone other than your spouse. Did you know that the recipient may have to pay the IRS the deferred income tax on that entire retirement account, if they withdraw the whole balance? They may even owe the IRS a penalty! And, yes, this is in addition to the estate tax.
Did you know that the recipient may have to pay the IRS the deferred income tax on that entire retirement account, if they withdraw the whole balance?
Consequently, it’s not unusual for a person with a larger estate to discover, sadly, that more than half of his or her hardearned money will eventually wind up in the hands of Uncle Sam even though the person had previously paid income tax on much of this wealth.
Now, here’s the third surprise: a little planning can make an enormous difference. For example, did you know that you can actually redirect money that is headed for Uncle Sam by earmarking it to a charity or ministry of your choice? Did you know that estate gifts to qualified ministry or charities are 100 percent deductible?
Gift and estate planning are well worth the investment of your time even if your estate is modest and taxes are not an issue. Planning allows you to make the decisions about your estate, not the government.
Gift and estate planning are well worth the investment of your time even if your estate is modest and taxes are not an issue.
Most important, we strongly urge you to start some Estate Planning. Do it now while you are healthy and mentally sharp. You’ll not only be amazed at the benefits of prudent planning, you’ll be surprised at how good you feel taking care of this crucial area of your life.
This document is provided to assist you in your estate planning process and is not meant to offer financial or legal advice. Please contact your Attorney or Financial Advisor to obtain appropriate professional advice relevant to your particular circumstances.