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Embracing Modern Estate Planning
In a constantly evolving society, it is paramount to stay up-to-date with the latest trends and developments in every sphere of life. Estate planning is no exception. As DeFreitas & Minsky LLP, a certified public accountant firm in NY, we value the importance of innovative and contemporary strategies in estate planning. This serves to meet the unique needs of our clients.
An ample body of research and data points to the revolutionary effect of modern technologies on estate planning. A report by Investment News forecast increased use of computer software and automation in estate planning by 2023. Besides, a study by Trusts & Estates journal reveals that 79% of estate planners adopted technological tools in 2020, a rise from 61% in 2019. This highlights the transforming landscape of estate planning.
The Shift to Digital Assets
A key feature of modern estate planning is the inclusion of digital assets. These assets range from blogs and social media accounts to digital currencies. According to the United Nations Conference on Trade and Development, global digital economy reached $11.5 trillion, or 15.5% of global gross domestic product (GDP) in 2020. The exponential growth of digital assets underscores the increasing need for their inclusion in estate planning.
• With the surge in the value of Bitcoin and other cryptocurrencies, digital currencies are gradually becoming a significant part of estate planning.
• Many individuals run successful online businesses. Assets such as domain names and e-commerce stores are critical to these ventures and should be integrated into estate planning.
Tax Planning in Modern Estate Mastery
Modern tax planning strategies now find their way into comprehensive estate planning. The Tax Cuts and Jobs Act (TCJA) of 2017 increased the federal estate tax exemption to $11.58 million in 2020. Consequently, less than 0.1% of estates were taxable, according to the Tax Policy Center. This influences estate planning for high-net-worth individuals and families, prompting the need for advanced tax planning strategies.
• Utilizing the annual gift tax exemption is a typical tactic implemented to reduce estate taxes.
• Establishing trusts, such as irrevocable and revocable trusts, is also an effective estate planning tool that serves purposes beyond tax planning.
The Rise of Estate Planning Software
Technology advancement now extends to estate planning. A report by Grand View Research stated that the global estate planning software market is expected to grow at a compound annual growth rate (CAGR) of 14.3% from 2020 to 2027.
• Legal document automation ensures the creation of error-free and customized estate planning documents.
• Estate planning software provides a centralized platform to manage assets, thus simplifying the process.
Emphasis on Medical Directives
Modern estate planning focuses on comprehensive planning, which includes an individual’s medical and long-term care preferences. This is particularly critical given the aging population in the US. By 2050, those aged 65 and above will constitute over 20% of the total population, as per the US Census Bureau.
• Creating an Advance Healthcare Directive or Living Will is beneficial in making an individual’s healthcare wishes known.
• Designation of healthcare proxies ensures decision-making responsibilities are entrusted to the right persons in case of incapacitation.
Conclusion
The inevitable evolution of society calls for a shift towards modern estate planning. As experienced accountants at DeFreitas & Minsky LLP, we realize the significance and effectiveness of embracing these changes. We are dedicated to offering our clients the most contemporary, comprehensive, and tailor-fit estate planning services. Together, we can take advantage of the fast-paced development, advancements in technology, and modern tactics in estate planning. The goal remains to maximize value while ensuring your legacy endures.
