Estate Planning Quick Reference
June 20, 2008 | Leave a Comment
Even though most estates won’t owe Uncle Sam, estate planning is essential for protecting you and your loved ones.
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Provide for minor children. Your will should name both a guardian and a financial trustee for your kids in case you and your spouse die.
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Designate beneficiaries. Your will should include a simultaneous death clause to pass your estate to your children or designated beneficiaries should your spouse die shortly after you. If you don’t write a will, the state will split your estate according to its laws of intestacy and your estate will have to pay for the administration.
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You can’t disinherit your spouse. If you write a will, you spouse can elect to take what you give them or their elective share entitled to them under the statute. If you don’t write a will, your spouse can elect to take their intestate share or their elective share entitle to them under the statute.
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Provide for all your children. If you leave everything to your spouse, your children that are not of the marriage will not inherit from you. You will need to create a bypass trust agreement if you want them to inherit.
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You may not be able to avoid probate. Unless your entire estate is in your trust, you may still need to rely on probating your will. The process will be shorter and less expensive.
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You can disinherit your children. Or anyone else for that matter, but only if you spell it out in your will and/or trust.
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Avoid having subjective conditions on inheritance. If you’re worried about responsibility, a spendthrift trust can control how money is distributed so an irresponsible heir can’t blow it all at once.
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Keep designated beneficiaries on retirement and life insurance policies current. These assets pass outside of the estate by contract law only if they are kept updated.
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Consider reducing your estate tax liability by giving away assets before you die, holding them in joint tenancy or transferring ownership to a trust. You can gift as much as $12,000 annually to as many people as you want, and you can pay someone’s education and medical expenses directly to the providing institution, without triggering federal gift tax.
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Review your will — and life insurance — after major life changes. If you remarry, consider a prenuptial agreement. If you move, remember that estate laws vary from state to state.
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Estate state tax obligations can be minimized if you plan for them. In 2007 and 2008, only the portion of an estate over $2 million is subject to federal estate tax. The threshold rises to $3.5 million in 2009 before the tax disappears in 2010. It will return in 2011 with a $1 million threshold unless Congress decides otherwise. In Tennessee, the threshold is $1 million.
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Prepare a durable power of attorney for finances, a living will and, because living wills aren’t always enforceable, a proxy for health care. Also consider a living trust.
It’s important to see an attorney to determine which of the above applies to you and which estate planning tool best suits your ultimate goals. Avoid do it yourself programs and cheap documents prepared by paralegals. Make sure that your final wishes are fulfilled and that you do so in the most efficient manner possible with the right estate planning tool.
Source: California Estate Planning Blog
Memphis Estate Planning Podcast Series: Health Directives
June 18, 2008 | Leave a Comment
Estate Planning 101 — Health Directives
The Memphis Estate Planning and Probate Lawyers of Ferrell Law Firm have posted the third installment of a podcast series on Estate Planning originally posted on the Death and Taxes Blog
A discussion of Illinois health-related directives such as powers of attorney and living wills.
