Estate Planning Trusts
There are a wide variety of trusts used for estate planning purposes. However, three trusts are typically used in estate plans for married couples. Those trusts are:
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September 22, 2010
June 16, 2010
Estate Distribution to Grown Children
When your children were young, your primary concern was probably how to provide for them in the event you and your spouse died. Even though they may now be grown, your children are probably still the center of your estate plan. Just because they are adults doesn't mean that you have to leave their entire inheritance to them outright. Consider these factors first:
May 19, 2010
Estate Planning for Blended Families
While estate planning can be complex for all families, it can be especially complex for those in other than a first marriage. Ensuring that everyone is treated fairly can be a challenge, but these tips can help:
April 28, 2010
Estate Planning and Your Retirement Accounts
For many people, retirement accounts, including 401(k) plans and individual retirement accounts (IRAs), are their most significant assets. While you may think you'll need every bit of money in those accounts for your retirement, what would happen if you die at an early age? You should include these accounts in your estate plan so heirs inherit them with minimal estate- and income-tax effects. Some strategies to consider include:
Continue reading "Estate Planning and Your Retirement Accounts" »
April 5, 2010
Organizing Your Estate
Don't think you're finished with the estate-planning process once a will, trusts, and other estate planning documents are in place. From your heirs' point of view, it's just as important for you to organize paperwork and inform them of basic decisions. One way to approach this task in a systematic manner is to prepare a notebook including the following items:
December 29, 2009
Regularly Review Your Estate Plan
Between the fluctuating stock market and declining home values, the value of your assets has probably changed dramatically over the past couple of years. Thus, you should probably take a look at your estate plan, considering the following:
August 27, 2009
The Case for Grantor Retained Annuity Trusts (GRATs)
The lifetime gift tax exclusion is $1,000,000, but is not scheduled to increase in the future. If you'd like to pass on more than $1,000,000 to your heirs before your death but don't want to pay gift taxes, you may want to take a look at Grantor Retained Annuity Trusts (GRATs).
Continue reading "The Case for Grantor Retained Annuity Trusts (GRATs)" »
January 15, 2009
Keep Your Estate Plan Flexible
Estate planning has become more difficult in recent years due to changing estate tax laws. Estate tax rates and exemption amounts keep changing, increasing to $3,500,000 this year. Next year, the estate tax will be repealed, but it will be reinstated the following year based on 2001 tax laws. All these changes can make it difficult to determine whether your estate plan should be revised due to new changes. Thus, it is increasingly important to build flexibility into your estate plan. Below are eight key points to consider:
January 11, 2009
Gifting Considerations
Deciding whether you should give a significant asset to an heir during your life or after your death has typically involved weighing potential estate tax costs against capital gains taxes that would be due when the asset is sold.
May 5, 2008
How to Protect Your Blended Family
According to the Census Bureau, blended families -- families that include children from one or both spouse's previous marriages -- now outnumber nuclear families. Yet, too many people in these blended families assume that their estate will be distributed to their spouse and children when they die. Without an estate plan, that assumption may be misguided.
April 7, 2008
Incentive Trusts
You're looking for an effective way to get your heirs to do what you think is best for them, for the family, and for the world. Is an incentive trust the right vehicle to accomplish that?
March 12, 2008
Being Named a Guardian
When asked to serve as the guardian of someone's minor children in the event of his/her death, it is usually meant as a compliment. However, don't accept this role without giving it serious thought. Consider the following:
March 5, 2008
Following Through on Your Estate Plan
Usually, a great deal of thought and effort goes into estate planning documents. You need to consider all your assets, decide who should receive those assets, and find the best strategies to accomplish your goals. However, your work is not over once you have signed those documents. You also need to make sure your assets are properly positioned to go to your intended heirs. Some problems to watch for include:
March 3, 2008
Why You Should Consider a Trust
Trusts are often viewed as estate planning tools used to reduce estate taxes. With the changing estate tax situation, does that mean that trusts are no longer needed for estate planning purposes? The answer is probably no, for a couple of reasons. First, estate taxes are only scheduled to be repealed in 2010. They will be reinstated in 2011 based on 2001 tax laws. Second, trusts are established for many purposes, not just to reduce estate taxes. Below is a brief description of six of the more commonly used trusts:
February 4, 2008
How to Secure Your Financial Future
In a recent survey, 74.5% of individuals with at least $1 million in net worth felt that the world is a dangerous place (Source: Financial Planning, June 2007). While there might not be much we can do on an individual level to reduce crime, war, or even stock market corrections, there are things we can do to mitigate the risks that are under our control. If you are looking for ways to increase your personal financial security, consider the following tips:
September 17, 2007
Your Parents and Their Estate Plans
Estate planning can be a difficult subject to discuss with your parents. You don’t want to seem concerned about how much money they may eventually leave you, while they may fear you are interfering with their finances. But to help ensure their estate is settled quickly according to their wishes, family members should have some basic information. You don’t need to know the specifics about who will receive what, but you should find out some basic information such as the following:
May 17, 2007
Points to Consider When Deciding on a Guardian for Your Children
For parents with minor children, the most important reason for estate planning is to ensure that provisions have been made for their children. While it can seem overwhelming to deal with all the issues involved, consider what would happen if you and your spouse died without a will, with no provisions for a guardian, and without adequate money to help raise your children, making them dependent on the goodwill of relatives. One of your most important parental responsibilities is to make sure this does not happen. Some items to consider include:
Continue reading "Points to Consider When Deciding on a Guardian for Your Children" »
April 12, 2007
Organizing Your Estate for Your Heirs
Just because you have your will, trusts, and other estate planning documents in place, don’t think you are finished with the estate planning process. From your heirs’ point of view, it is just as important for you to organize your paperwork and inform them of basic decisions. One way to approach this task in a systematic manner is to prepare a notebook including the following items:
April 5, 2007
Estate Plans for Married Couples
Between the unlimited marital deduction (which allows married couples to leave any amount to their spouse without paying estate taxes) and rising estate exemption amounts, many married couples may not feel much need to plan their estates. However, before reaching that conclusion, consider the following items:
February 9, 2007
What Are Irrevocable Life Insurance Trusts
Typically, irrevocable life insurance trusts (ILITs) have been used to help pay estate taxes through the use of life insurance proceeds not considered part of the deceased’s estate. The trust receives the life insurance proceeds free of estate and income taxes. But with the uncertain future of estate taxes, you may wonder whether ILITs are still a valid estate planning strategy. You probably don’t want to undo any ILITs in place, since the estate tax won’t be fully repealed until 2010 and then will be reinstated in 2011. Even if the proceeds aren’t needed for estate tax purposes, you may find other uses for the proceeds, such as leaving larger bequests to beneficiaries or charitable organizations. Deciding whether to set up a new ILIT is a tougher decision. You should first analyze all relevant factors, including your views about the future of the estate tax. Below are some of the basic factors of irrevocable life insurance trusts (ILITs) that may help you with this analysis.
Continue reading "What Are Irrevocable Life Insurance Trusts" »
January 17, 2007
Life Insurance and Estate Planning
One of the more common reasons to own life insurance is to help fund estate taxes after your death. If the policy is properly structured, the proceeds will not be included in your taxable estate and your beneficiaries will not have to pay federal income or estate taxes. However, with the eventual repeal of the estate tax in 2010, you may wonder whether you still need life insurance for estate purposes.
October 6, 2006
The Basics of Charitable Remainder Trusts
A charitable remainder trust (CRT) is an irrevocable trust set up to benefit a charitable organization. The trust’s term is one lifetime, several lifetimes, or a period not to exceed 20 years. Basically, you irrevocably gift an asset to the CRT, usually an asset with a low tax basis that has appreciated significantly. During the trust’s term, you receive a certain amount of income and/or capital annually (called the retained interest). At the trust’s termination, the charitable organization receives the remaining assets (called the remainder interest). CRTs offers a number of benefits.
Continue reading "The Basics of Charitable Remainder Trusts" »
September 14, 2006
Watch Out for These Estate Planning Mistakes
To ensure your estate is distributed to your intended heirs at minimum estate tax cost, avoid these eight common estate planning mistakes:
Continue reading "Watch Out for These Estate Planning Mistakes" »
August 12, 2006
Gift Giving to Adult Children
With the high divorce rate in this country, you might have concerns about making large gifts to a married child. It’s one thing to worry about your child using the money wisely. It’s an entirely different worry to think your ex-son- or ex-daughter-in-law might leave the marriage with your money. Some ways to ensure the money stays in the family include:
August 6, 2006
Living Wills Don't Work
Time to abandon a failed policy! Living wills don't work -- and can't work -- for their intended purpose of allowing people to plan in advance how they'd want to be treated in end-of-life situations. According to a University of Michigan study, the very documents designed to help people choose the care they want at the end of their life fails to meet five key criteria for success.
July 10, 2006
Do You Really Need an Estate Plan?
Of all the reasons people find for not planning their estates, perhaps the most convincing is that their estate will not be subject to estate taxes. In 2006, your taxable estate must exceed $2,000,000 before being subject to estate taxes. However, an estate plan can provide numerous benefits in addition to reducing estate taxes.
March 13, 2006
Distributing Assets to Adult Children
When your children were young, your primary concern was probably how to provide for them in the event you and your spouse died. Even though they may now be grown, your children are probably still the center of your estate plan. Just because they are adults doesn’t mean that you have to leave their entire inheritance to them outright. Consider these factors first:
February 12, 2006
Dealing with Asset Basis
Deciding whether you should give a significant asset to an heir during your life or after your death has typically involved weighing potential estate tax costs against capital gains taxes that would be due when the asset is sold.
September 12, 2005
Estate Planning for Combined Families
The most common estate plan is to leave everything to your spouse, who then leaves everything to your children after his/her death. However, if this is other than a first marriage, you and your spouse may also have children from prior marriages. Then, you need to make fundamental decisions about how to treat assets each spouse brings to the marriage, how to distribute assets acquired after marriage, and how to provide for children from prior marriages. Some items to consider include:
May 14, 2005
Getting Organized for Heirs
Even if you have a formal estate plan, organizing your personal paperwork and informing heirs of basic decisions will make it easier for heirs to handle your estate after your death.
March 13, 2005
Is a Will Really Necessary?
Many people believe they don’t need a will. But how valid are the more common reasons for not preparing a will?
Estate Planning Tips
Current tax laws have made estate planning more complicated. The estate tax is scheduled to phase out gradually until 2009, be repealed in 2010, and then reinstated in 2011 based on 2001 tax laws. That assumes there will be no future tax legislation during that time. But don’t let these evolving tax laws prevent you from planning your estate. Instead, consider the following tips:
March 12, 2005
Thinking Through a QTIP Trust
A common estate plan for married couples is to set up two different trusts:
October 12, 2004
Discussing Inheritances with Heirs
Many people are uncomfortable discussing with heirs how they will distribute their estate. Perhaps you don't want your children to realize how much they may receive after your death. Or you may think your choice of heirs could change in the future. However, if you don't discuss your estate plan, disagreements and conflicts could erupt once the details of inheritances are revealed. For instance, siblings may resent each other if distributions are not equal. Children may resent a spouse from a second marriage if they feel that spouse is using up their inheritance. At that time, you won't be able to explain your thoughts and wishes regarding the distribution of your estate.
September 12, 2004
Selecting Beneficiaries for Life Insurance & Retirement Accounts
Many assets, including individual retirement accounts (IRAs), life insurance policies, and annuities, can have
beneficiaries designated to receive the asset after your death. Make these selections carefully, since they typically override any provisions in your will. Consider the following points:
Continue reading "Selecting Beneficiaries for Life Insurance & Retirement Accounts" »
August 10, 2004
Protecting Your Financial Assets
In light of recent global events, the world certainly seems like a more dangerous place, threatening your sense of personal safety and well-being. While there may not be much we can do on an individual level to reduce the threat of terrorism, war, or even stock market corrections, we can ensure that we take all appropriate steps to mitigate those risks under our control. If you're looking for ways to increase your financial security, consider the following tips:
June 1, 2004
Is There Still a Need for Second-to-Die Life?
Survivorship life insurance policies, also known as second-to-die life, insure two lives, with the insurance proceeds paid after the death of the second insured. This insurance is often used to provide financial liquidity to pay estate taxes after the death of the second spouse. But with the repeal of the estate tax slated for 2010, is this insurance still needed?
Continue reading "Is There Still a Need for Second-to-Die Life?" »
February 1, 2003
Market Declines and Your Estate Plan
The recent market declines have caused many individuals' investment portfolios to decline significantly. Individuals who thought they had more than enough assets to fund their own retirement and leave significant bequests to heirs may now wonder if that is still possible. If you are in that situation, evaluate your estate plans, considering the following:
An Evolving Estate Plan
Due to changes to the estate tax system over the next several years, you need to keep an eye on your estate plan. Estate tax rates and exemption amounts will be changing, possibly requiring adjustments to your estate plan.
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Recent Posts
- Estate Planning Trusts
- Estate Distribution to Grown Children
- Estate Planning for Blended Families
- Estate Planning and Your Retirement Accounts
- Organizing Your Estate
- Regularly Review Your Estate Plan
- The Case for Grantor Retained Annuity Trusts (GRATs)
- Keep Your Estate Plan Flexible
- Gifting Considerations
- How to Protect Your Blended Family
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