- Tax Planning
- Investments 1: Before you Invest
- Investments 2: Your Investment Plan
- Investments 3: Securities Market Basics
- Investments 4: Bond Basics
- Investments 5: Stock Basics
- Investments 6: Mutual Fund Basics
- Investments 7: Building Your Portfolio
- Investments 8: Picking Financial Assets
- Investments 9: Portfolio Rebalancing and Reporting
- Retirement 1: Basics
- Retirement 2: Social Security
- Retirement 3: Employer Qualified Plans
- Retirement 4: Individual and Small Business Plans
- Estate Planning Basics
- Introduction
- Understand the Principles of Estate-Planning
- Understand the Importance of Estate Planning and the Goals of Estate Planning
- Understand the Estate-Planning Process
- Know How Trusts Can Be Used to Your Advantage in Estate Planning
- Understand the Importance of Wills and Probate Planning
- Summary
- Assignments
Step 3: Determine the Cash Needs of Your Estate and Calculate Your Estate Taxes
Determining the cash needs of the estate is the process of making sure there will be sufficient cash available to pay the necessary debts, bills, and taxes. If the estate is large, there must be sufficient liquid assets available to pay the required estate taxes, as these taxes may be high.
Estate taxes are equal to the gift-adjusted taxable estate multiplied by the appropriate tax rate. To determine the net tax owed, calculate the total tax owed and subtract the unified gift-tax and estate-tax credit. Ensure that you have adequate liquidity available to your heirs. Cash-value life insurance may be used as a tool to ensure sufficient liquidity for paying estate taxes.
