Have you heard the news? Kansas City is home to some of the wealthiest neighborhoods in the country! According to a study conducted by Stephen Higley, urban geography professor at the University of Montevallo, there are four metro neighborhoods in Kansas City that are among the nation’s 1,000 wealthiest neighborhoods and incorporated suburbs. Higley based his findings on 2010 Census data. If you are among the wealthiest residents in Kansas City, then hopefully you are familiar with legacy wealth planning.
Kansas City’s wealthiest neighborhoods
The Kansas City metro neighborhoods that made the top 1,000 include Mission Hills, Hallbrook Farms-The Woods, Waterford-Leawood South, and the Country Club Plaza District. This is an elite group. According to reports, only 0.6 percent of the U.S. population, that is a little more than 2 million people, lives in the 1,000 wealthiest neighborhoods.
Ward Estates-Sunset Hill West in Kansas City ranked No. 91 on the list and has a mean household income of $372,684. Mission Hills ranked No. 322 on the list and has a mean household income of $301,687. Olathe’s North Shore Acres-Cedar Creek came in at No. 524 and has a mean household income of $275,141. Kansas City’s Sunset Hill neighborhood ranked No. 715 on the list and has a median household income of $259,219.
Legacy Planning in Kansas
Basic estate planning is a good idea for all individuals. However, if you are a resident of the Kansas City area and you have been fortunate enough to establish a strong financial foundation, it is crucial that you plan exactly how your legacy will be passed on to your heirs. Otherwise, your hard work and success may not be preserved for those you love.
Although there are many legal issues that must be considered in legacy wealth planning, this article will address a few of the most common areas that estate planning attorneys are equipped to handle, such as avoiding estate taxes, asset protection, and charitable donations.
The majority of estates do not have to pay federal estate or gift taxes because you can leave or give away a large amount of your assets tax-free. Currently, $5.45 million in property can be given away without incurring any taxes. This is known as the personal estate tax exemption. However, if your assets exceed that amount, you will need to plan accordingly. Effective legacy wealth planning can reduce the impact of estate taxes.
Another beneficial deduction is the marital deduction, which allows married couples to transfer property to each other, during life or at death, without paying federal estate or gift taxes. The amount is unlimited. When the spouse giving the assets dies, the value of the property passing to the surviving spouse is deducted from the gross estate of the deceased spouse.
Planning for asset protection for individual heirs is equally important. Why? Because legal judgments or certain debts can have serious financial consequences for those you leave behind. Protection from creditors is essential. Asset protection planning essentially means protecting assets that are subject to claims by creditors and placing them out of reach.
Once you have a clear picture of your financial goals, an estate planning attorney can help you determine which assets are exempt from creditors. Those that are not, can be repositioned in order to be protected from potential creditors. Asset protection planning can incorporate family limited liability companies and irrevocable trusts for you and your heirs.
Giving to charity is not only personally rewarding, but it has certain tax advantages as well. To encourage philanthropic endeavors, the federal government has established tax deductions for donations made to qualified charities. Legacy wealth planning can also include gifts to charitable organizations.
Despite the tax advantages, there are certain situations that must be considered. Of course, planning for your heirs is important, and whether you give a specific dollar amount to charity or a percentage can have a huge impact on a number of your assets your heirs will ultimately inherit.
There are several ways to plan your charitable donations. For example, charitable trusts allow you to use the same pool of assets for both your heirs and the charities of your choice. Charitable Remainder Trusts provide for a specific distribution, at least once a year, to one or more beneficiaries, at least one of which is not a charitable organization.
Join us for a free workshop! If you have questions regarding legacy planning or any other estate planning matters, contact Gaughan & Connealy for a consultation either online or by calling us at (816) 974-3030.