Creating an estate plan helps ensure an individual’s wishes will be carried out as opposed to a court determining how an individual’s estate will be distributed. An estate plan can limit the costs of administration and prevent delays in the distribution of important items and gifts to loved one. An estate plan can also reduce taxes of the individual while they are alive as well as limit tax liability for beneficiaries

strategies to limit tax liability are unique to each individual. However, one of the most common tax benefits contemplated in an estate plan is limiting capital gains on the transfer of appreciable property – usually stocks and real estate. Other considerations include whether the estate or beneficiary bear the tax liability of transfers, effectively utilizing the annual gift tax exemption, and taking advantage of portability for the lifetime federal estate and gift tax exemption (for high net worth estates).

while individuals spend a lifetime investing for retirement, their retirement savings can become quickly depleted when one or both spouses require long-term care. Since the costs of this care can exceed six figures, estate plans should contemplate creating a safety net to preserve assets for the benefit of the healthy spouse and other loved ones individual wishes to provide for. This safety net is qualifying for Medicaid, which will pay the full cost of nursing home care.

This planning is recommended early since Medicaid rules to determine eligibility look at transfers made during the last 60 months.