For 2015, the federal estate tax exemption has been raised to $5.43 million per person. This means that a dwindling number of estates will actually exceed the exemption. Here in Massachusetts, however, the exemption is only $1 million. Therefore, asset protection can be refocused toward reducing other types of taxes, including the Massachusetts estate tax.
It is not immediately known whether the Massachusetts Legislature is considering increasing the estate tax exemption for its residents. Therefore, anyone with an estate that exceeds the current exemption still needs to structure his or her estate plan to eliminate — or at least reduce as much as possible — his or her taxable estate. Doing so will leave more of an individual’s estate to be distributed to his or her heirs and beneficiaries.
Taxes are not the only thing from which an individual needs to protect his or her assets. The proper estate planning can protect one’s assets from creditors and/or ex-spouses. Further, a beneficiary who is not necessarily good with money could be protected through the use of a trust, since the creator of the trust can restrict when and how distributions are made.
Asset protection is often a primary concern for those creating an estate plan. Not only do people want to ensure that their families are taken care of after their death, but they may also want to set aside enough assets for retirement. Further, people are living longer and may need to consider making arrangements for the possibility of long-term care. If there is a possibility that an individual will seek Medicare benefits as part of his or her long-term care plan, asset protection could play an integral part.
Source: investors.com, “Estate Planning For 2015: How To Protect Assets From Taxes“, Margaret Price, Jan. 2, 2015
