| Estate Planning | |
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| Overview | Estate planning is the management of the assets and properties you have acquired so that you can transfer them at your death exactly as you wish. Of course, a major part of that is avoiding as much estate tax as possible. As usual, good research is key; it is important to familiarize yourself with state tax and property laws, and/or consult with a professional advisor who is familiar with the local laws and processes applicable to your estate. |
| Tax Planning | Tax planning ensures that assets are passed on to beneficiaries without being unnecessarily diminished through estate and gift taxes. It is important for an individual to be familiar with the taxes he or she may encounter when planning an estate, where they apply, and how best to circumvent them. Reducing and eliminating transfer taxes and income taxes wherever possible is one of the main focal points of planning an estate. The gift tax, estate tax, and the transfer tax are the main methods by which the government attempts to get its share of your final estate.
Most people are aware that the government imposes a Federal Estate Tax and a Federal Gift Tax liability on transfers of property. However, few people are aware that there is a second level of transfer tax imposed on transfers made by an individual during life or at death: the Generation-Skipping Tax. A lifetime gift-giving program to one�s children which makes use of an individual�s $10,000 annual exclusion from Gift Tax is generally a good estate planning tool. |
| Wills
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Wills are documents that define the administration and distribution of an estate when the owner dies. Beneficiaries and alternate beneficiaries are defined in a will and it affects all assets that are not automatically passed on through operation of law or contract. Wills are simpler and less expensive to prepare than a revocable living trust. Living wills are another type of will, in which the healthcare provisions of the trustor are defined in the event that he or she may not be able to express these preferences due to incapacity. |
| Trusts | Trusts are a useful instrument in estate planning for many reasons. A trust allows assets and properties to pass to the trustee or trustees directly without first going through probate. It protects the funds from any creditors who may wish to collect from the trustee, as well as providing a way for an estate to pass to beneficiaries without being heavily taxed. |
