Readers of this blog may have seen the recent piece about Phil Mickelson's frustration with the California state income tax. He's certainly not the only one complaining, as income taxes have steadily increased over the last several years and certainly seem likely to continue to grow in the foreseeable future. Death and taxes, the two things that are inevitable in this life, as the saying goes, also are the two things that make having an estate plan absolutely essential for people looking to protect their assets and avoid unnecessary taxation.
One of the major differences between President Obama and Mitt Romney was their opinions on how to handle taxation of the middle and upper class. Obama favors an increased tax rate for the wealthiest Americans, and not surprisingly, Democrat-dominated California voted to increase the state tax rate on earners in the higher tax brackets. People earning between $250,000 and $300,000 will now pay 10.3 percent in state income tax. Those earning $1 million and more will now pay 13.3 percent, which is a 3 percent increase.
California residents usually find that utilizing the services of an estate planner is the best way to avoid some of the pitfalls associated with planning for death or the chance of incapacitation.