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Estate Planning

Estate planning is a crucial element of retirement as it is important to know your wealth will be passed along to your family according to your wishes.  A will is the most basic item a person should possess to protect their property and assets.  If a person dies without a will, it is called intestate, in which case the law dictates on how the property is distributed. This law depends on the deceased’s marital status and if you they have any descendants. However, this law varies by State and laws regarding intestate recently experienced some changes which could impact pre-existing wills and trusts.  Therefore, it is important to have a will or trust examined and updated according to the most current state laws.  

Do you need a will or trust created according to your state’s laws?  Contact a financial planner in your area who can help.

When you have a living will, you can rest assured knowing that your children, property, and estate will be taken care of according to your wishes.  If you don't have a will, the state can determine who gets your property and a judge may decide who will raise your children.  The basic elements of a will determine who will get and/or manage your property and assets, your minor children, and the executor authorized to carry out your will. A will cannot resolve issues such as the estate taxes that may be owed at the time you or your spouse pass away, children from previous marriages, or property or assets intended to be passed down two generations to grandchildren.  These types of situations require further legal attention.

The following are topics associated with estate planning that a local financial planner can assist with:
  • Estate Planning
  • Asset Protection
  • Wills
  • Revocable Trust
  • Irrevocable Trust
  • Taxation
A trust is a written legal agreement by which your assets are managed by one person and transferred to others. Property and assets can be transferred to a trust, including real estate, a business, cash, stocks, and bonds. Revocable trusts can be changed at any point, but they don't offer the same asset protection as an irrevocable trust.  The setback of assets in revocable trusts is that they are subject to being seized by creditors, it is applied to the grantor's annual income and can incur income taxes, and they are subject to estate taxes along with all the other assets at the time of the grantor's death. When choosing between a revocable trust and an irrevocable trust, you must decide if you're looking for a trust that is flexible and provides income or if you're looking for asset protection and tax benefits.  An experienced financial planner can help you decide the best option for you.

When a person passes away, their descendants have to pay an estate tax in order to receive their inheritance. A will cannot resolve issues such as the estate taxes that may be owed at the time you or your spouse pass away.   The IRS uses fair market value to determine the total amount of property in your estate.  They also include assets such as cash, securities, real estate, insurance, trusts, annuities, businesses and other assets.  According to the Economic Growth and Tax Relief Reconciliation Act, the estate tax exemption amount was to $3.5 million in 2009. The estate tax will be repealed in 2010, unless Congress takes further action to extend the current rate.

Do you have questions or concerns regarding your estate? If you are interested in finding out more about estate planning, contact a local estate planning professional today.