Completing your comprehensive estate plan is something that should be done with the support of a qualified estate planning lawyer. An estate planning lawyer helps you to look at all of the assets you own and all of your potential liabilities to determine how these may factor into your probate estate.
Your entire estate includes other benefits and assets as well, such as those that pass outside of probate, like life insurance policies and retirement accounts. Bear in mind that certain assets may have additional financial implications at the time they passed to another party. The most important of these is known as a step up in basis. if you have assets like real estate bonds or stocks and are considering gifting these to others while you’re still alive, it might make more sense to wait.
The reason for this is because when these assets are sold, any increase from the value at the time the asset was first acquired, and the sale price may be subject to capital gains taxes which could seriously impact the overall value of the asset. When you pass away, however, and an heir receives those assets at that time, the assets get a step up in basis.
This means that the market value of the asset at the time you pass away is the cost basis for the heir, which eliminates appreciation prior to that in terms of tax implications. Make sure that you consult with a qualified estate planning lawyer to determine which of your assets may be affected by a step up in basis.