Comfort Takes Planning

Few things give investors more comfort than knowing that the assets they have worked so hard to accumulate over the years may be protected and preserved for their heirs. They are entitled to know that they have control over what happens to their estates when they die. Whether it’s providing income for a spouse, educating children or grandchildren, or leaving money to a favorite charity, we all want to know that the proceeds from our estates will be used to fulfill our wishes.

Yet, without planning, huge portions of estates are often sacrificed to taxes. How often do we read about situations in which sizable estates are reduced by millions because of estate taxes? It’s sad, but it happens frequently.

Under current law – until 2009 – estate taxes can devour a substantial percentage of an estate. The law requires that these taxes be paid in cash, usually within nine months after death. If most of the estate’s holdings are in real estate or other illiquid investments, heirs may have trouble raising cash to pay the estate taxes.

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