High net-worth individuals and small business owners have always consulted a variety of professionals when determining the best way to pass wealth to future generations. However, retaining the services of investment advisors, attorney and tax specialists is becoming more common among individuals of nearly all income classes.
Amid looming changes to estate tax law - which would reduce the current $5 million estate tax exemption to $1 million and raise the top rate from 35 to 55 percent - more wealthy Americans may be required to pay an estate tax. Once individuals factor in the cost of their homes, vehicles, investments, retirement accounts and other assets, reaching the $1 million estate limit is not as difficult as it once was. Therefore, more professionals are seeing an uptick in business from broader demographics who are planning for the future, according to Fox Business.
As the process of passing wealth becomes more complex, and consumers seek out the best trusts and investments for their unique situation, the assistance of a number of advisors may be more imperative to save money and avoid costly tax law errors.
Fox Business noted that there are significant factors affluent individuals and small business owners must consider when estate planning. The ways in which investment income and trusts will impact tax obligations is crucial to planning for a person's retirement and senior years as well as their ability to pass wealth onto future generations.
Further, Fox Business noted that a family's unique needs - such as whether beneficiary's have a chronic illness or a special financial situation - may also warrant the assistance of legal professionals when they start making estate preparations. As the end of the year approaches, professional services firms are expected to see a spike in the number of families seeking guidance, making it important that those who have not started preparations develop a plan quickly.