If you are preparing an estate plan, one of the figures that you are likely focused on is the value of your estate. Naturally, the higher the value, the more you are leaving behind to your heirs. If you are not happy with the current figures, there are many different ways to increase the value of your estate. Here are just a few.
1 – Invest
Investing is one of the best ways to improve your net worth. The key is selecting the right type of investments given your goals. There is also a risk versus reward analysis to consider. Investments with the best payouts often come with the most risk as well. Consult with a financial advisor for guidance on growing your wealth through investments.
2 – Minimize Taxes
Taxes should be a major consideration in financial and estate planning. There is both your annual tax obligation (federally and locally) and potential taxes on your estate after death. Strategies are available to tackle both of these issues. Your financial advisor, CPA and estate planning attorney must work together to effectively minimize your taxes now and in the future.
3 – Purchase Life Insurance
If your primary goal is to maximize financial assistance to your heirs, then a life insurance policy may be the solution. There are many different types of policies to consider. The best policy for you depends on your age, health, financial capabilities, and other similar factors.
4 – Reduce Expenses
One of the quickest ways to increase the value of your estate is to reduce your expenses. For instance, if you still own a large home but are an empty nester, downsizing may reduce your housing expenses significantly. If you have high interest loans but liquid funds earning a lower interest rate, paying off the loans may give your estate value a boost. Again, consult with your financial advisor on what makes the most sense when it comes to your expenses and debts.
5 – Increase Value of Assets
Last, evaluate whether your current assets can increase in value. For example, could renovations to your home boost its value and your equity? Should you consider homes in different communities with better market growth? Given that your net worth is a combination of assets and debts, changes to either can result in a higher net.
Other Ways to Increase the Value of Your Estate
The above is just a generic look at different ways to increase the value of your estate. Given that every estate is unique, there may be other strategies that will work for you. Start by compiling information on your accounts (assets, debts, policies). Meet with professionals for personalized advice on increasing assets, reducing taxes and debts, and maximizing your overall value. For estate planning and a referral to a financial planner, please contact our team at any time.