Planning Your Estate
10 Ideas to remember in planning your Estate
- Everyone needs a Will, a Durable Power of Attorney, a Designation of Conservator, and a Living Will with a Designation of Health Care Agent, even if you do not have a lot of money or assets.
- Revocable Living Trusts should be considered where there is a need to maintain control of assets, provide for management of assets, avoid probate, privacy, Estate Tax Planning, real property in more than one state or to protect beneficiaries.
- Long-term care insurance is appropriate where current income exceeds normal living expenses but is not enough to support the additional burden of long-term nursing or custodial care.
- No taxes result from gifts to a spouse either during life or at death in almost all situations.
- Gifts of $12,000 can be made by each spouse (or single taxpayer) each year to an unlimited number of beneficiaries tax-free to reduce future Estate Taxes. Generally, Beneficiaries pay no income tax on gifts.
- In addition to gifts to spouses and $12,000 annual gifts, every person can give $1,000,000 during life without incurring Federal Gift Taxes. State Gift Taxes may still be payable, however.
- While ESTATE PLANNING for Estate Taxes is indicated whenever an Estate could exceed $2,000,000 with future growth (including probate Estates, jointly held property, life insurance, and qualified plans), a number of good reasons exist to plan for smaller Estates.
- Married couples with potentially taxable Estates should establish Estate Tax Exemption Trusts in their wills or living trusts to increase the amount to pass to children or others tax-free to $4,000,000 or more. Uncertainty over the future of Estate Taxes repeal requires planning now.
- In potentially taxable Estates, avoid the use of jointly held property unless each spouse has property or benefits equal to the full Estate Tax Exemption in his or her own name. Jointly held property can have hidden dangers… You may wish to consider a Credit Shelter Trust.
- Where, Estates are expected to be federally taxable, life insurance should be held by an Irrevocable Insurance Trust.