estate planning
(page 1 of 5)
Do you know what will happen to your estate after you die? Who will get what? How much will you have to pay to Uncle Sam? How much does your family actually get to keep?
Some of you may be surprised to learn that you can lose up to 40% of your estate right off the top due to taxes and probate costs. And, if you do not have enough liquidity, your property can be sold (often at less than fair market value) to make cash available to pay for the estate tax and probate fees. Then after this money is deducted, who will get your assets and when? If you do not plan now, you will not have any control and bad results may follow. For example, a court may give millions of dollars of your estate to your young child who may not be able to manage large sums of money. He/she may then end up losing huge amounts due to carelessness, ignorance, poor management, or wrong advice.
Estate planning is not just for "wealthy" or "old" people. It's something everyone needs to do regardless of your age, marital status, or wealth to keep control of your assets after you die. Even if you already have a Will, your estate planning may not be complete! If all you've done was create a Will, it's time for a change. Why? Because a Will does not avoid probate.
Estate planning is generally used to preserve our estates by reducing taxes and avoiding probate. However, because the assets and value of your estate continually changes, an estate plan is always evolving. Thus, estate planning is not just a one time issue. You should review your estate plan every two or three years, sooner if there has been a significant personal event such as birth, death, marriage, divorce or inheritance or when there is a change in the U.S. tax laws concerning estate and gift tax.
Through estate planning, you can:
- Determine:
- who will get what;
- how they get it; and
- when they get it;
- Minimize Federal Estate Taxes; and
- Reduce or Eliminate Probate Costs.
Your estate plan can consist of many individual documents. The more typical estate plan created by our firm consists of: (1) "living" trust, (2) pour over will, and (3) power of attorney for healthcare.
The following pages were excerpted from information packets from the State Bar. It provides helpful information to help you understand estate planning principles and to help you determine whether you should see an attorney for your estate planning needs.
More
