Wills and estate planning are complicated processes that can stress you out for a long time. It involves various legal aspects that require assistance from a Will Lawyer, and if it’s a big matter, then you can also go for a Will Law Firm.
Such an estate tax planning lawyer will help you understand the legalities and complications of drafting a will for your loved ones after your lifetime.
In this article, you will learn about the role of a will lawyer in estate tax planning. You will explore various aspects that are involved in the estate tax planning process.
How Does a Will Lawyer Help in Planning Estate Taxes?
Here’s how a will and estate lawyers in Kitchener-Waterloo will help you with your estate tax planning process:
Will Lawyer Understand the Applicable Taxes
This is essential while developing the estate tax planning will. A will lawyer will help you clearly understand the provincial estate administration tax. They will explain the way it is calculated and when it is applied to your estate.
The estate lawyer in Kitchener will also give you advice on other potential taxes that may potentially affect your estate. These include income tax on the final tax return of the deceased and the capital gains tax on the deemed disposition of assets at the event of death.
Will Lawyer Minimize Estate Administration Tax
Minimizing the tax on estate administration is divided into four parts: strategic asset structuring, multiple wills, lifetime gifts, and trusts.
During the strategic asset structuring, lawyers will advise on how assets should be held and the use of beneficiary designations, which potentially allow such assets to pass directly to beneficiaries outside of the estate and thus not to be subject of the estate administration tax.
For people who own private company shares or assets in other provinces or jurisdictions, a lawyer may suggest drafting multiple wills. By doing so, you will be able to keep specific assets away from probate. This will effectively reduce the overall EAT payable.
At the same time, there are no gift taxes in the province. Still, a lawyer can advise on the implications of making lifetime gifts, considering potential capital gains tax issues. They will also help you ensure that such gifts are in line with your overall estate plan.
Establishing trusts, either during one’s lifetime(living trusts) or within a will(testamentary trusts), can be helpful in estate tax planning in some specific situations. It will help you potentially avoid or defer estate administration tax and other taxes. An estate planning lawyer will help you determine whether a trust is suitable and draft the required documentation.
A Will Lawyer Drafts a Will That is Tax Efficient
A well-drafted will that is developed with the expert guidance of a lawyer will ensure that the estate plan is structured to be beneficial for any tax minimization strategies.
The lawyer will also ensure that the will clearly describes asset distribution in an effective way that considers the tax implications for both the estate and its beneficiaries.
Offering Comprehensive Estate Planning Advice
Estate tax planning is just one aspect of an extensive estate plan. An estate lawyer will keep your overall financial situation, family needs, and long-term goals in mind to develop an extensive plan that addresses tax implications along with other essential aspects like:
- Appointing a suitable executor(estate trustee).
- Planning for potential incapacity through a Power of attorney.
- Addressing guardianship for minor children.
- Planning for differently-abled beneficiaries.
- Considering charity.
Ensuring Proper Legal Compliance
A wills and estate lawyer will also ensure that all estate planning documents, especially the will itself, are compliant with the laws of the province. This will further lower the risk of legal challenges, ensuring the realization of intended tax benefits for your beneficiaries.
These are some essential ways through which a wills and estate lawyer can help draft estate tax plans and ensure minimal inconvenience.
4 Common Facts to Consider While Hiring a Will Lawyer for Estate Tax Planning
Here are some essential facts you need to consider while hiring an estate lawyer for your tax planning process:
Experience and Expertise
Look for a lawyer who has specialization in estate planning and tax laws as such areas are complex in nature and require specialized knowledge.
Enquire about their experience with situations similar to yours and their track record in handling complex cases.
The lawyer should also be well-versed in the specific estate and tax laws in the province.
Extensive Estate Planning
Estate planning is something that is more than just creating a will. It involves strategies for asset management, minimization of taxes, and ensuring smooth transition of assets after you pass away.
You should also consider how the lawyer will help you in protecting assets from creditors and ensure proper distribution as per your wishes. You also need to seek strategies to lower tax liabilities like using trusts, gifting assets, or enjoying the benefits of tax credits.
Communication
An experienced estate lawyer will collaboratively work with other professionals like financial advisors, trust companies, chartered accountants, etc., to develop an extensive estate plan.
You should also choose a lawyer who offers clear, concise, and responsive solutions to your queries and concerns. You also need to consider whether the lawyer provides ongoing support and advice as per your special circumstances.
Fees and Transparency
Discuss the lawyer’s fee structure upfront, whether it is hourly, flat fee or a blend of both. Also, ensure that the lawyer is transparent about their fees and other potential costs.
Furthermore, you need to evaluate whether the fees are reasonable for the services they offer.
Conclusion
Having in Kitchener will and estate lawyer during your estate tax planning process is essential. They provide expert advice on the estate administration tax and other relevant taxes. They are also helpful in developing and implementing strategies that will be helpful in legally minimizing the amount payable towards the estate administration tax.
Apart from all these things, the lawyer will also assist you in drafting wills and ensure consistency among other relevant documents to ensure you save a lot in tax returns.
This way, you will be able to ensure that your beneficiaries get what they generally deserve without facing any inconvenience.
