Estate Planning

[av_buttonrow alignment=’center’ button_spacing=’5′ button_spacing_unit=’px’ alb_description=” id=” custom_class=” av_uid=’av-k84w1yr0′ admin_preview_bg=”] [av_buttonrow_item label=’Real Estate’ icon_select=’no’ icon=’4′ font=’entypo-fontello’ size=’small’ label_display=” title_attr=” color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ link=’post,1′ link_target=”] [av_buttonrow_item label=’Business Formation’ icon_select=’no’ icon=’5′ font=’entypo-fontello’ size=’small’ label_display=” title_attr=” color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ link=’post,36′ link_target=”] [av_buttonrow_item label=’Estate Planning’ icon_select=’no’ icon=’6′ font=’entypo-fontello’ size=’small’ label_display=” title_attr=” color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ link=’post,55′ link_target=”] [av_buttonrow_item label=’Intellectual Properties’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ size=’small’ label_display=” title_attr=” color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ link=’post,959′ link_target=”] [av_buttonrow_item label=’Contracts’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ size=’small’ label_display=” title_attr=” color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ link=’post,949′ link_target=”] [/av_buttonrow] [av_heading heading=’Estate Planning’ tag=’h3′ style=’blockquote modern-quote modern-centered’ subheading_active=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” color=” custom_font=” margin=” margin_sync=’true’ padding=’10’ link=” link_target=” id=” custom_class=” av_uid=’av-k84wb2ei’ admin_preview_bg=”][/av_heading] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-k84uw9uy’ admin_preview_bg=”] Planning Your Estate. You don’t have to be wealthy to plan an estate. In fact, when you buy life insurance or name a beneficiary of your 401 K plan, you are planning your estate. Estate planning is organizing your assets for your maximum benefit while you are alive and seeing to it that what is left after your death is passed on to the right people quickly and with a minimum of taxes and legal fees. A will is usually the cornerstone of most estate plans. But a will needs to be approved by a probate court – a process that keeps your heirs from receiving the property immediately and that involves legal fees, which may reduce the amount they receive. Consequently, many people use additional ways of leaving assets to their heirs. The most popular options are:

Last Will and Testament – Your will states whom you wish to have what part of your estate after you die. It also names an executor to administer your estate and a guardian for minor children

Joint Tenancy with Right of Survivorship – This special type of co-ownership is often used by married couples for their homes and bank accounts. On the death of one of the owners, the other automatically becomes the sole owner of the property. Please note, some states hold that jointly held bank accounts are frozen upon the death of one of the owners until tax authorities assess the amount of money in the account

Payable-On-Death Accounts – These bank accounts can be used to transfer funds automatically to a beneficiary. Also called trustee bank accounts, they can be helpful if state law requires that a joint bank account be frozen when one of the account holders dies. U.S. Savings Bonds may also be registered as “payable on death” to a named beneficiary

Life Insurance – Insurance Policies are often purchased to provide immediate income to the beneficiaries or to pay estate taxes. But life insurance can increase estate taxes. Consult an expert on estate planning to find out how to avoid this pitfall through the use of cross-owned policies, irrevocable life insurance trusts, or other technical arrangements.

Gifts – The law currently allows gifts of up to $12,000 a year to any individual without the payment of a gift tax, or up to $24,000 if husband and wife make a joint gift. Gifts between spouses do not have any limit; the marital deduction permits spouses to give an unlimited amount to each other. Gifts reduce the size of an estate (thereby saving taxes), reduce probate costs, ensure that the right person receives he property, and sometimes reduces taxes. However, gifts that are made within one to three years of the giver’s death (depending on the state) may be subject to inheritance tax

Trusts – Trusts that take effect during a person’s lifetime are called inter vivos, or living, trusts. Those set up in a will to take effect after death are called testamentary trusts. Only a living trust avoids probate. A typical reason to create a trust is to provide for minor children or others who are incapable of taking care of themselves. By creating an irrevocable living trust (one that cannot be changed), you remove the property that was placed in the trust from the estate for estate tax purposes

Pensions and other Employee Benefit Plans – Proceeds from pensions and benefit plans are passed directly to the designated beneficiaries. Please note, in certain instances the funds may be included in a person’s estate for tax purposes if the proceeds are payable to the estate or if the proceeds result from employee contributions to the plan.
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