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Inflation can add new challenges to estate planning.
It can increase asset values, legal fees and everydayliving costs.
Here are several ways inflation might reshape your planning andconcrete ways you’ve got the option to respond.
If prices rise sharply, the same amount of money will buy less of what your heirs need.
Adjust the amounts based on current living expenses.
This way, your assets are more likely to keep pace with or outgrow inflation.
Talk to a trusted financial professional to check that your investment choices match your tolerance for risk.
Inflation can raise their fees.
Ask for estimates from multiple attorneys or planning firms.
You could discover that some offer flat fees or lower rates for common tasks.
While that can feel like a win, it may also trigger higher estate taxes.
The thresholds forfederal estate taxare adjusted yearly, but they may not keep pace with rising asset values.
This gap could create a tax burden on your heirs.
Moving assets to loved ones while youre alive can reduce the size of your taxable estate.
This might help you stay undercertain tax thresholds, depending on the rules at the time.
That lowers potential estate taxes, though these structures usually come withlegal fees and formalities.
Greater Strain on Healthcare and Long-Term Care Planning
Healthcare costs keep climbing.
You dont want to find out too late that these reserves wont be enough.
Some policies can help pay for extended care at home or in a facility.
Though premiums can be steep, coverage could prevent your heirs from tapping into core assets.
double-check you have documents like healthcare powers ofattorney and living willsset up in advance.
When combined with trusts or designated accounts, these documents can guide how medical costs are paid.
have a go at estimate how much long-term care might cost in your region.
If you expect expenses to double over a certain period, plan accordingly.
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