If you have recently come into a substantial personal injury award, your assets will surely be affected. Besides being supremely useful for the accident victim, it is important to determine how your settlement award will change any estate plans you may have.
When you choose how to divide your assets among any dependents or your spouse, that is the process of estate planning. You will decide which people should inherit which of your assets and when they will be able to collect them. You have multiple options for your estate plan. You could choose to leave your assets divided among family members or other close individuals, or you may leave money to an organization. Planning your estate will help you avoid extra state and federal taxes that affect the whole amount of estate income when you die.
Acquiring Financial Documents Post-Accident
After an accident, you may suffer financial woes as well as a physical personal injury. Thankfully, an adequate settlement award can take care of these financial costs if they have suffered a less serious injury. However, should a victim be injured so badly that they are caused a disability and have to rely on extensive health care measures, they may need to alter certain financial documents to reflect their permanent disability. That may include any documents related to their estate planning such as wills, trusts and designated beneficiary records.
While you want to report everything in your estate, be sure to avoid over-reporting your assets. If you don’t report accurately, the estate will be assessed as higher in value than it actually is resulting in being subject to higher estate taxes.
The Difference Between State and Federal Taxes When Planning Your Estate
If a settlement is worth more that the federal exemption limit, a plaintiff may have to revise their estate plans in order to fit into the guidelines set by the government. State governments do not have fixed estate taxes and some states don’t even charge a property tax. You must be aware of your state’s regulations regarding estate planning in order to understand which taxes your estate will be subject to.
Devising a Smart Investment Plan
Hiring an estate planning attorney will help you invest wisely after you receive a settlement. If you hire an attorney they can help you establish a fund, ensure you can pay for your current bills, and keep your award untouched by excessive taxes and fees.
Your personal injury award should be protected from excessive taxing and saved for your loved ones. If you are ready to set up your family and beneficiaries for the future, and want to ensure they receive their inheritance, call a lawyer today such as the estate planning attorney Scottsdale AZ who specializes in estate planning today.
Thanks to authors at Arizona Estate Planning Attorneys for their insight into Estate Planning.