What you need to know about high net worth estates in Louisiana

What you need to know about high net worth estates in Louisiana

| Apr 6, 2021 | Estate Planning |

In Louisiana, your estate goes into succession after you die. This means that the state verifies your heirs and beneficiaries. If a will exists, the state probates it as well. To create the best deal for your loved ones after you die, it’s important to understand various aspects of high net worth estate planning in Louisiana. Each state has its own laws.

Federal gift tax

Individuals could gift up to $15,000 untaxed to people who are not their spouses. A married couple who is gifting the money from their joint account could gift up to $30,000 untaxed. Keeping yourself within the limits can help your money go longer. These limitations are on a per-person basis, so you could gift $15,000 every year to two different people without worrying about taxes.

Inheritance tax

Louisiana is one of the states that doesn’t charge an inheritance tax. If your estate is over $11.4 million, your assigned executor will have to file a federal estate tax return. The federal estate tax return is due nine months after a person’s death, but your executor could request a six-month extension if you need more time to process the grief without the stress of all the legal tasks you have to handle.

Because the IRS and the federal government view estates as separate entities, you will need to apply for an EIN. You can find the application form on the IRS website.

Living trust vs. will

Living trusts are good choices for people with a high net worth because they save you time and money in the long term. Living trusts may have higher initial upfront costs than traditional wills, but you likely care more about the long-term view as estate planning isn’t something you’re intending for the short term.

You can set up a revocable trust to have the ability to manage and to modify the trust while you’re alive. There are plenty of options in setting up your revocable trust in a way that you’re happy with. If you don’t trust a beneficiary to spend the money wisely, you can place restrictions on how they can use the money. Maybe you want them to only use the money for education and health. Another possibility with revocable trusts is designating an independent trustee who will have the power to approve or reject distributions.

As a high-net worth individual, your approach to estate planning is a bit different. If you want to know how to make your dollar go the farthest, you could consult with a lawyer and a financial advisor.