Few people want to talk about what preparations they have in place for their survivors after they pass away. When the topic does come up in Florida, dying with too much money in the bank is the last thing people are concerned about. Floridians are usually more concerned about not having enough to cover outstanding debts or pass on to beneficiaries.
However, according to Business Insider, dying with too much money may cost your heirs quite a bit in taxes. The current lifetime gift tax exemption is $11,400,000 per person. Heirs may end up paying taxes on any amount over this value.
To remedy this problem, Business Insider recommends that people start the gifting process as soon as possible to reduce the amount of money remaining later on. To many people, this seems like a drastic method of reducing taxes and fees. After all, what if a person becomes sick or falls into debt and needs that money back?
Another way to reduce how much money heirs will lose to the government is to leave behind wills or a revocable living trust. Without these provisions in place, heirs can expect to lose 3% to 8% of the inherited assets to fees in probate, regardless of gift tax exemptions. With a revocable trust in place, fees may range from 1% to 3% of assets.
CNN notes that there is one caveat of a trust. The owner must retitle the assets of the trust in the name of the trust. Failure to complete this step may result in those assets going through probate at the higher fee rates. Note that even with a trust in place, people may want to consider a pour-over will to handle all assets not included in the trust.