06 Jan Use a team of experts to create your estate plan
Q. I have a question about estate taxes and avoidance. Who is the “right” expert to go to for professional advice: an estate lawyer, a general attorney, or a certified financial planner?
A. Estate taxes are a complicated issue, and you may want more than a single advisor working for you.
The best way to maximize estate tax savings is to have all three kinds of advisors on your team, said Anthony Vignier, a Kearny-based certified financial planner and attorney.
But, he said, you may also want to consult with a certified public accountant, or CPA.
“A CPA can advise clients regarding taxes and must have a working knowledge of any changes to the tax code,” Vignier said.
But most tax planning for an estate will require legal documents to be drafted, and this should only be done by an experienced estate planning attorney.
An experienced estate planning attorney is going to be able to give you a good overview of your estate taxes under various scenarios, make recommendations on how to reduce your individual estate taxes — or the taxes incurred by your family as a unit — and in the process not unduly increase other types of taxes such as income taxes, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
She said this will all need to be done while fulfilling your non-tax related goals, such as making sure your assets pass to the people you want to benefit in a manner that is most beneficial.
“An experienced estate planning attorney is also going to be able to work with your accountant, certified financial planner and primary attorney as needed to obtain a complete picture of your assets and family dynamics, and then follow through upon your death to ensure that your intentions are carried out as smoothly and economically as possible while minimizing the tax consequences,” Romania said.
You may find that more complex documents, such as revocable trusts, irrevocable trusts, special needs trusts, a power of attorney, and other vehicles can help your situation, Vignier said, so an attorney with estate planning expertise is the best expert to establish the plan that’s right for you and your heirs.
A certified financial planner (CFP) should also be part of your team, Vignier said.
“They can help you design strategies using investments, 401(k)s, IRAs, life insurance and other options to grow your estate in a tax efficient manner before it is passed on to your heirs,” he said. “A CFP can also make sure that all your beneficiary designations are correct and keep an on eye the big picture so that through proper planning the value of your assets can grow.”
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This story was first posted in January 2015.NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.