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Investing as an Estate Planning Strategy

Investing as an Estate Planning Strategy

Posted by Chris Peterson | Jul 30, 2015 | 0 Comments

Investing as an Estate Planning Strategy

Investing as an Estate Planning StrategyThe purpose of estate planning is to save as much as possible from federal taxes and maximize the amount of the estate assets for the benefit of heirs. There are numerous strategies that your Bryan estate planning attorney can discuss with you, one of which is to invest a portion of the estate assets.

Taxes on the Estate

The vast majority of individuals do not need to concern themselves with avoiding estate tax. Unlike many other states, Texas does not have a state tax on estates. Moreover, the federal estate tax is only imposed on estates that have a worth of $5.43 million or more as of 2015, and each year this amount is adjusted for inflation.

That said, you may need to be concerned about capital gains if assets in the estate are invested and increase in value. For instance, if you purchase stocks that become a part of your estate when you die, when beneficiaries sell these they will pay capital gains on any profit.

Investing and Estate Planning

One of the most frustrating issues after the death of a loved one is when the estate is tied up in probate. It is important for assets to be made available quickly, as the immediate family can suffer financial difficulties during the interim. To avoid putting your spouse and/or children through this it is important that you invest part of your estate in instruments that will become available immediately after your death. A trust is ideal for this purpose, as is a life insurance policy.

To collect on a life insurance policy usually all that is required is a death certificate. A life insurance policy will help beneficiaries avoid problems with paying final expenses and provide funds for them to continue their lifestyle. You will want to purchase a “permanent” whole life policy rather than a term policy.

You may also consider the purchase of an annuity. This instrument provides beneficiaries with benefits much the same way a life insurance policy does, in that it passes through probate. You have the option to select one of two types of life annuities, joint-life and joint-and-survivors. Your attorney can help you decide which is best suited to your needs.

There are many other ways you can invest your estate for the eventual benefit of your heirs. These include, but are not limited to:

  • Individual stocks
  • Bonds
  • Mutual fund shares

For Questions about Investing and Estate Planning

If you are considering investing part of your estate assets in order to benefit your loved ones after you die, it is important that you work with a Bryan estate planning attorney. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.

About the Author

Chris Peterson

Chris Peterson is the owner of Peterson Law Group. He practices primarily in the areas of wills, trusts and estate planning; probate and trust administration; elder law; and business law. Chris is also the owner of Brazos 1031 Exchange Company.


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