The increase of the estate tax exemption amount to $5 million per individual will dramatically reduce the number of estates that will have to pay estate taxes.

Does this mean that only families with significant wealth need to focus on estate planning? The reality is that proper estate planning extends well beyond minimizing or preparing for estate taxes. A comprehensive estate planning strategy offers the following:

  • Orderly transition of wealth to heirs or charitable concerns
  • Means to avoid a lengthy and costly probate process
  • Planning for minors or other extended family members
  • Steps to transfer decision-making responsibilities in light of unforeseen circumstances
  • Living will or health-care proxy declarations, which can facilitate decisions around medical treatment or end-of-life wishes
  • Documenting wishes for final arrangements

For more information about estate planning, download our investor education piece, A closer look at the new estate tax rules.