Make estate planning a top priority this summer

tax preparerAs Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.”  Estate planning may not be a top priority to many people.  However, if ignored, your assets may end up in the wrong hands or there may be unintended consequences.  This is not just something the wealthy need to worry about.  After all, death and taxes affect everyone.

Below are some helpful tips and useful information:

  1. It is important to make sure you title your assets appropriately.  For example, did you know that bank and other investment accounts which are titled “Joint Tenants with Right of Survivorship” (JTWROS) pass automatically to the surviving joint account holder at your death and skip right past your will?  If your will only addresses bank and investment accounts titled JTWROS, your will is mostly worthless.
  2. If you have a child with special needs, you need to coordinate your documents to make sure your child does not receive any assets upon your death that could jeopardize any governmental benefits he/she is receiving.
  3. State estate laws should be considered since not all states piggyback the federal estate laws.
  4. An estate needs to be partially liquid (available cash) to pay for expenses upon your death and to provide for your family’s needs.
  5. You can minimize your estate taxes during your lifetime by taking advantage of the annual gift tax exemptions.  For 2012, you can give up to $13,000 per person per year without incurring a taxable gift.  You may also make unlimited payments directly to certain medical and educational providers on behalf of your family.

Then what?

  1. Seek advice from an estate planning team to set up a will and/or trust.  This team should include your estate planning attorney, financial adviser and CPA.
  2. Review your asset titling and beneficiary designations to make sure everything is as you intend it to be.
  3. Have the professionals map out how your assets will actually be distributed upon your death.
  4. Plan during your lifetime to minimize your estate taxes, but remember to keep enough for you to live on.

If you have any questions regarding estate planning or the steps you need to take, please contact us, and we would be happy to help.


1 thought on “Make estate planning a top priority this summer”

  1. Great article. The discussion of joint property is very important where second or third marriages are involved.
    Also, actually calculating the after tax amounts going to beneficiaries when there are assets outside the will is imperative. A working estate plan needs to actually meet the clients net tax donative scheme.

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