The tired old saying is true: Nobody lives forever. We all have to face the end of life, and one task before it happens is how to leave your estate to heirs.
Traditionally, we consult with experts and attorneys when retirement years approach. Then, when all financial matters are locked in with the proper paperwork, we wait for the inevitable.
Then, when we die, the estate is distributed, less funeral costs, attorney fees, humongous inheritance taxes and other cuts that chop away much of the estate’s value. Only after that, whatever is left goes to the heirs.
It can be more economical, as well as personally very satisfying, to start distributing the money and other assets while you’re still around. First, your heirs will get the money at younger ages when they need it most.
Second, there may be considerable savings on taxes. You’re allowed to give as much as $14,000 a year per person. While you may have to pay taxes when you withdraw the gift money, the recipients do not have to declare it as income.
The old cliché is that the ideal day to die is just as you’ve spent your last penny. Then, if you’ve financially helped your heirs, and just before you earn your wings, you can bid a proud angelic farewell with some Sinatra “I Did It My Way” lyrics:
And now, the end is near,
And so I face the final curtain.
My friend, I’ll say it clear;
I’ll state my case, of which I’m certain.
I’ve lived a life that’s full,
I traveled each and every highway,
And more, much more than this,
I did it my way!