Three Estate-Tax Myths That Cost Families a Fortune

Myth one: 'The exemption is high enough that I don't need to plan.' The current federal exemption is large, but it is scheduled to fall, and state thresholds are far lower. A plan built on today's number can be obsolete before the ink dries.

Myth two: 'A will is enough.' A will governs probate assets — but retirement accounts, life insurance, and most jointly held property pass by beneficiary designation or operation of law. The majority of an estate can bypass the will entirely, and a stale beneficiary form can override a decade of planning.

Myth three: 'Gifting is always better than holding.' Gifting removes future appreciation from your estate, but it also gives up step-up in basis at death. For appreciated assets, holding can be the more tax-efficient path. The right answer depends on the asset, the heir, and the timeline — never a rule of thumb.