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From Primogeniture to Digital Assets: The Story of U.S. Estate Planning

The Origins: From Primogeniture to Partible Inheritance

The history of estate planning in the United States is deeply rooted in British common law. Initially, the settlers from England brought with them the system of primogeniture, where the oldest son inherited the entirety of his father's estate. However, following the Declaration of Independence, this system was replaced with 'partible inheritance', reflecting the democratic ideals of the newly formed nation.

Read more: Per Capita vs Per Stirpes & Right of Representation

The Industrial Revolution and Beyond

The 19th century, characterized by industrialization and wealth accumulation, brought significant changes to estate planning in the U.S. Wills and trusts became more prevalent, and taxes on estate and inheritances were introduced to fund the nation's expenses, including various wars. Notably, in 1916, the federal government introduced an estate tax on the transfer of wealth at death to fund World War I, a tax still present today.

Evolving Laws and Practices in the 20th Century

The mid to late 20th century ushered in further modifications to tax laws affecting estate planning. The unlimited marital deduction, introduced in the 1980s, allowed spouses to transfer any amount of property to each other tax-free. The use of A-B and A-B-C type trusts also became increasingly popular, effectively reducing the overall value of one's estate and minimizing tax obligations.

The Contemporary Landscape

The 21st century has seen estate planning becoming increasingly complex, with shifts in tax laws, the emergence of digital assets, and changing family structures. Contemporary estate planning is no longer solely about the transfer of financial wealth but also about securing your future and the legacy you wish to leave behind.

Comparative Overview: USA vs. UK

While estate planning in both the U.S. and the UK has similar origins, there are significant differences in practices today. Unlike the U.S., the UK charges an inheritance tax paid by the person who inherits the estate, not the estate itself. Also, trust law in the UK has evolved differently, with fewer tax benefits than in the U.S. Furthermore, community property systems, prevalent in 13 U.S. states, are absent in the UK.

The Uniqueness of Louisiana

Interestingly, Louisiana stands out in the U.S. legal landscape due to its French Civil Codes' foundations. The Napoleonic Codes influence has led to differences in Louisiana's real property law, making it unique compared to the rest of the country.

Your Future and Estate Planning

Regardless of its historical evolution, estate planning today is a crucial component of securing your financial future and your family's wellbeing. Consider engaging with an experienced estate planning attorney to guide you through the complexities of the process.

Read more: How to Minimize Inheritance, Estate & Capital Gains Taxes

 

 

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