Estate Planning as a Career

You’re First Consideration, whether you are a young adult of age 18 or a senior of age 65 plus, you need to set up a viable estate plan that protects and provides your loved ones with financial security. So who than should be considered the best possible combination of professionals needed in setting up such a valuable plan?

Make no mistake, there are books and a multitude of software packages available containing pre-written legal documents that are available for your purchase and subsequent use. However, bear in mind Federal laws change and State laws vary on estate planning issues. An outdated form or one containing the incorrect legal terminology can most certainly invalidate or at minimum, create an extended probate of what you thought was a drum-tight estate plan.

Don’t get me wrong, I’d be the first to admit that I have the highest regard for the hard core do-it-yourself individual. However, when it comes to estate planning and all the complex legal issues, I’d also be the first to highly recommend one seek the advice of the schooled professionals. Recommended, with a professionalism requirement in mind, here are some fields of expertise you should consider in achieving a complete estate planning team;

ACCOUNTANT - One of the most personal financial documents you complete annually is your state and federal tax returns. If you use a tax consultant, no one is usually more familiar with your financial situation than these accountants. If you run your own business, the accountant is the one who completes the check and balance sheets. So of course, use your accountant to assist in gathering the information necessary to put together a good estate plan that holds no oversights.

ATTORNEY - Like many professional fields, attorneys as well have specific fields and levels of competence. So, you do not need a criminal lawyer, paten (more…)

Sometimes I am amazed at the number of people who place estate planning on the “back burner.” But still, in certain ways it is understandable. Many feel that they just don’t have time to go to an attorney. Certainly, there is also the mortality factor: Preparing an estate plan sometimes forces us to think in uncomfortable ways.

Still, there must be at least some argument for doing nothing. So, after thinking hard, here are a few — with my tongue firmly in my cheek:

1. There is really no need to designate your child’s guardian in a will. Your child really doesn’t care who raises him. It really won’t affect him if a judge makes crazy Aunt Tilly his guardian, should you suddenly die. If she throws your child into a cage until his 18th birthday, it really will work out fine in the end. Don’t worry.

2. Whatever you do: If your home has appreciated over the years do not put it into a trust. Although trusts usually cost perhaps a few thousand dollars to prepare and to fund, you should insist on probate. In California, for example, probating a house worth $500,000 will cost $13,000 in attorney fees alone. This excludes filing fees, appraisal fees, and other probate expenses. California lawmakers even help you to spend this money by fixing the probate attorney fee schedule in the statutes. Also, this is a minimum fee, as court approved extraordinary fees are even more. But don’t worry: It’s only money.

3. There is another reason to demand a probate: Most probate proceedings last a year, or more. Trust settlement is generally faster. That’s simply too darn quick; this is another reason to avoid trusts at all costs. Don’t worry: It’s only time.

4. It gets really good if there is a lot of discord in your family. What a show! If you really work at it, everyone will be fighting to be the administrator of your estate. If (more…)

Estate tax, or the death tax as it is sometimes referred to, is an issue often bandied about at election time. If the innuendoes of the sound bites are to be believed, the instant someone dies, the government collects a huge amount of tax from the estate just as a general principle. The specter of estate tax is looming in the corner of every hospital room in America, or so goes the story, waiting to deprive widows of their husbands’ hard-earned pensions and children of their college funds, if Mr. X is not elected to Congress or the White House.

While it is true that a decrease in estate tax benefits the wealthiest two percent of Americans, it is also true that only the wealthiest two percent of Americans are subject to estate tax to begin with-at least under present law.

Estate taxes are taxes assessed on property transferred at the time of death. They are based on the gross estate, including real estate, insurance, trusts, annuities, cash, business interests, securities, and all other assets. The items are not assessed at their value at the time they were purchased, but rather at their fair market value at the time of death. For example, if you purchased a home for $50,000 in 1970 and the value of the property has appreciated in the meantime to be worth $175,000 based on sales of comparable properties in the same neighborhood, estate taxes would be assessed on the present worth of $175,000.

Once the gross estate is calculated, applicable deductions are subtracted from that value. Deductions include property that passes to surviving spouses, mortgages and other debts, and estate administration expenses. In some cases the value of operating business interests or farms may be reduced, according to the IRS, “for estates that qualify.” The value arrived at after deductions is referred to as the “taxable estate”. Lifetime gifts are added (more…)