San Luis Obispo Estate Planning Attorneys On the Importance of Tax Planning
“Tax planning” is not the same thing as “avoiding taxes”. Tax planning is a legal estate planning tool that allows individuals to protect earnings and assets during your lifetime, for future generations, and for your estate. Tax planning can be applied to a number of types of taxes including: income tax, property taxes, capital gain taxes, and estate taxes (also known as death taxes). Proper tax planning can reduce those taxes, defer payment of certain taxes to a later time, or prevent certain kinds of taxes from increasing when assets are transferred to beneficiaries of your estate. Some taxes may still need to be paid, but the goal is to use existing laws to control and limit your estate’s tax exposure. Tax codes and tax laws are complex and a tax planning program is best undertaken under the guidance of an experienced estate planning attorney, such as San Luis Obispo’s Toews Law Group, Inc.
You don’t have to be wealthy or have significant assets to see a benefit from tax planning. Tax planning can help protect any asset such as your home, stocks held in a brokerage account, a retirement plan, or possible future income from an insurance policy. Tax planning is a tool for:
- Retirement
- Reducing your current tax liability
- Predicting and managing future tax liability
- Reducing the tax liability for your estate beneficiaries
- Business continuity
One recent example is the implementation of Proposition 19. Proposition 19 eliminated certain exemptions from reassessment for the transfer of real property from parent to child transfers. With limited exceptions, the transfer of property from parent to child will cause the property to be reassessed and likely will result in an increase in property taxes. Although Proposition 19 eliminated certain exclusions from property tax reassessment, there are certain tax planning and estate planning techniques which may assist with reducing the potential property tax burden imposed upon the child receiving a property.
The strategies for successful tax planning include:
- Trusts
- Wills
- Life insurance policies
- Retirement plans
- Gifts to beneficiaries
- Family foundations
- Business structure
Other events such as a promotion and salary increase, receiving an inheritance, reduction in salary for any reason, starting and operating a business, saving for children’s college, or buying a new home can be reason to seek out tax planning.
Tax laws are complex and touch every part of business, estates, trusts, nonprofit foundations and charities and personal life. Accurate legal counsel and legal strategies are important for tax and estate planning and the San Luis Obispo estate planning attorneys at Toews Law Group, Inc. are highly experienced in guiding individuals, businesses and nonprofits in the best direction for getting the most benefit from short and long term tax and financial planning.
Call today. Toews Law Group, Inc. San Luis Obispo estate planning and tax attorneys take the time with you in the beginning to make sure your business or estate is set up in a tax advantageous manner. They are also pleased to take the time to help you restructure your business or revisit your trusts and estate plans.
This information has been prepared by Toews Law Group, Inc for informational purposes only and is not legal advice. The transmission of this information is not intended to create an attorney-client relationship. Contacting us does not create an attorney-client relationship. Consult an attorney for advice regarding your individual situation. Contact information: Toews Law Group, Inc.,1212 Marsh Street, Suite 3, San Luis Obispo, CA 93401, (805) 781-3645
