Estate Planning as a Career

Back in 2001, Congress changed the law on estate taxes, creating estate tax exemptions that changed over the years. For instance, in 2008, the exemption from federal estate tax is set at $2 million. If you have one dollar more than that number, your excess will be taxed at 45 percent plus, depending on the amount of the excess.

According to this legislation, the federal estate tax exemption amount was to increase in 2009 to $3.5 million and in 2010, the federal estate tax was abolished for a year. Even though your estate may not be subject to federal estate tax if you were to pass in 2010, your estate will not receive a “stepped up” basis in that year. In other words, your estate is “trading” the federal estate tax for the capital gains tax in that one year.

As this law now exists, in 2011, the federal estate tax exemption is scheduled to come back at the $1 million amount, with the highest tax rate at 55 percent. This means that many estate plans (wills and trusts) would need to be reviewed to determine how the law would apply and how much tax your estate would be subject to. Obviously, it also would mean that many more estates would be subject to federal estate taxes if this were to happen.

Despite that there is only one year left before the federal estate tax is repealed and then springs back with a $1 million exemption and a higher top tax rate, Congress has failed to act. Some years ago, there was a movement to abolish the federal estate tax altogether, as the thought was that a person paid taxes of many varieties all their lives and should be allowed to transfer the balance of their assets tax free to their children. Despite this fact, Congress instead entered into this compromise and has failed to place estate tax reform on the front burner.

This lack of action by Congress has caused people to be on a roller coaster, ha (more…)

Advance inheritance is a term used by cash lenders and private investors who provide funds to beneficiaries of an estate held in probate. When a person dies, all of their possessions are transferred to probate. Depending on the complexity and circumstances of the estate, the probate process can last between six months and three years.

Obtaining advance inheritance is similar to applying for a loan. However, no interest in charged on the advance and there is no note to repay. Instead, the cash advance is repaid through the estate when probate settles.

Funding sources typically provide inheritance cash advances to heirs entitled to $15,000 or more. However, some cash advance providers will work with beneficiaries whose inheritance is as small as $2500. Beneficiaries of small estates generally have better success in obtaining a cash advance through private investors who specialize in probate estates.

When seeking advance inheritance funding, beneficiaries are required to provide personal information and details of the estate. Funding companies usually require a copy of the decedent’s Last Will and Testament, Petition for Probate, Inventory and Appraisement statement, Death Certificate, and Listing Agreement or Sales Contract for real estate holdings.

A credit report will be obtained for heirs requesting a cash advance for inheritance. If the applicant has outstanding judgments, creditor liens, child support or bankruptcy proceedings, advance inheritance will typically be denied.

After all documents have been verified by the funding source, advance inheritance distributions generally occur within 3 to 5 business days. This timeframe can vary depending on the advance amount and policies of the funding source.

Funding sources assume significant risk when providing advance inheritance. First, there is the potential of ins (more…)

Appointing a probate executor to administer your estate when you die is a very important decision. Your chosen estate administrator will be responsible for distributing assets and personal belongings according to directives outlined in your Last Will and Testament or Living Trust.

Should you die intestate (without a Will), the probate court will appoint a probate executor to oversee and administer your estate. If you want to make certain your final wishes are carried out the way you intend, it is imperative to execute a Will or Living Trust. Otherwise, you will be leaving matters in the hands of someone you may not trust or a complete stranger.

Once your estate planning documents are notarized and executed, the probate executor is required by law to adhere to directives outlined in the Will. However, if the Will is contested by an heir apparent, a judge will make decisions based on probate laws.

Oftentimes, the probate executor is a direct lineage relative such as a mother, father, daughter, son, sister or brother. However, anyone can be appointed to administer an estate. In some cases, it is better to appoint someone outside of the family. This is particularly true if family dysfunction exists or relatives live out of state.

In many cases, the estate executor is responsible for funeral arrangements. People who pre-arrange their funeral eliminate a tremendous burden from the executor and family. Pre-arranged funeral services can include the purchase of a burial plot, casket, cremation urn and headstone. Some people purchase their burial clothes in advance; especially if they have been diagnosed with a terminal illness. Many funeral homes offer pre-arranged funeral services which can be paid for over a period of time.

Life insurance policies can be used to cover the costs of funeral expenses. The average cost of a funeral (more…)