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More Than 40 Years Of Legal Service To The Baton Rouge Region

Understanding bequests in estate planning

On Behalf of | Mar 21, 2023 | Estate Planning |

Baton Rouge Legal Blog

If you’re considering your will or planning your estate in Louisiana, you’re probably concerned with ensuring your assets are transferred in accordance with your wishes. The concept of a bequest is at the heart of this process.

In estate planning, a bequest is a term for passing assets to any people or organizations through your estate plan or will. Using bequests to transfer assets can have tax implications, so it’s important to understand how the law treats them.

How bequests work

In a will or estate plan, you will designate that certain of your assets will pass to some entity or entities after your passing. You can grant a bequest to a person like a loved one or friend or to an organization such as a charity or college.

The IRS allows for an estate tax exemption, meaning up to 12 million dollars may be bequeathed without being subject to taxes. After that threshold, your bequests will be taxed.

Remember that a gift exemption is also offered annually, coming in at around $16,000. If you’re concerned about your bequests exceeding the estate tax limit, take advantage of the annual gift tax exemption to transfer assets in advance.

Making sure bequests are handled properly

The two basic keys to ensuring your bequests are honored is the creation of a will and ensuring you have an executor who will execute the terms of the will.

Assuming you have a legally valid will and an executor, you can rest assured that your bequests should reach their recipients.

There are some additional steps you can take to maximize your bequests, like setting up trusts for your beneficiaries or other financial arrangements. But as long as your will is set up correctly, you should be in good shape regardless.

The bequest is at the heart of estate planning and ensuring that your assets end up where you want them to after passing. Using bequests properly gives you better control over your estate.