Estate Planning

          We look at ways to create an effective estate plan - one that can account for everything and one that your family, friends, and favorite charities can count on. Effective planning begins with an understanding of what happens to assets after death. Effective planning also provides you with the opportunity to make certain your assets go where you want them to go and to do so in a tax-efficient way.

Your Will is the Cornerstone of an Effective Estate Plan:

          A will controls the disposition of many of your assets, but not all of them. A will does not make certain, however, that your loved ones, close friends and favorite charities are not shortchanged or left out in the cold.

          If a person dies without a will, the estate will be divided according to state intestacy laws: a statutory formula is applied to divide the property between family members. No thought is given to how the deceased would have taken care of family member, friends, or charities.

          When you create and execute your will, you determine who gets what. Creating a will provides you with the opportunity to make specific gifts for those special people in your life and to support organizations. A lot can be accomplished with your will in place. But a will is not a complete estate plan. There is more to consider . . .

Joint Property and Beneficiary Designation: Property that is More than Your Own:

          Usually, property belongs solely to one individual. But at other times, two or more persons "own" the same property. Different persons may have equal rights to the property or one person may simply have a survivorship interest. These shared ownership arrangements can be defined as "joint tenancy" or "joint tenancy with rights of survivorship." Or, a person may have property interests through a P.O.D. (or payable on death) provision.

          Keep in mind that bank, investment and retirement accounts are often titled in two or more names. The owner of these accounts designates a beneficiary or beneficiaries to receive all or part of the property in the event of their death. This designation holds even if a will says different.

Life Insurance: Another Opportunity for Beneficiary Designation:

          Life insurance is a contractual arrangement outside your will that you hold with your insurer so that a sum or benefit goes to your designated beneficiaries when you die. This will take place whether or not you have a will; or, if you have a will, regardless of what the will says. A policy and the benefits paid on that policy are not included in the policyholder’s probate estate (unless that person has made the benefit payable to the estate itself). In most cases, a life insurance policy is purchased for the benefit of a loved one. Life insurance can provide peace of mind that all will be taken care of.

          Life insurance can also be an asset to donate to a charitable organization. Under a contingent arrangement, the charity will receive proceeds if the original beneficiary cannot claim the proceeds. Or, a donor can donate the policy outright to the charity and take a tax deduction for the face value or fair market value of the policy (whichever is lower). Consider your personal circumstances.

Don’t Wait for Your Will - Reduce Your Estate and Avoid Taxes:

          An effective way to reduce the size of your potential estate and (perhaps) your estate tax is to regularly make gifts during your lifetime. Every year, you can give cash or property valued up to $12,000 to any individual or organization without incurring gift taxes under the annual gift tax exemption. If you are married, you and your spouse can give any person cash or property valued up to $24,000 in a year. And the exemption applies to each person.

          A gift to a qualified charity is not subject to gift taxes, which means such gifts can exceed the annual exemption amount without incurring the gift tax. In fact, there are helpful tax benefits that apply when you make a gift to a qualified charity, you may claim an income tax deduction for the value of a gift.

          Another effective way to reduce the size of your potential estate is to create a living trust or a charitable remainder trust. The basic idea is that you take from your potential estate to avoid potential taxes and direct that asset to someone to meet an existing need. The upshot is that by giving something away today, you control how your assets are distributed and used for the benefit of others. You can find out more by coming in for a consult.

          Call us for more help. We have reduced fee estate planning packages available!