The Top 3 Estate Planning TipsCarl Hampton
September 25, 2008 — 1,180 views
Benjamin Franklin said on more than one occasion, "In this world nothing can be said to be certain, except death and taxes." Knowing this, why do so many Americans fail to keep an up-to-date Estate Plan. You would think the last thing we would want to do is pass away without ensuring the well being of our loved ones. Most of us would agree that death is not the easiest subject to talk about, but we really should be prepared for all that legal stuff that follows our death.
1.Revise: Update Estate Plan
If your current estate plan is older than five years, revise it by amending the plan instead of starting a new document. You would probably want to have a lot of say in your estate plan, but do not create an estate plan by yourself, even if you believe that your estate plan is not going to be difficult. You should always talk to an attorney that specializes in estate planning. For a local listing of estate attorneys, visit http://www.lawyers.com. Click on "Estate Planning" under the "Trust and Estates" option.
Make sure you find a reliable power of attorney for health care and property matters. Recent cases like Terri Schiavo demonstrate the worse case scenario of not explaining healthcare requests clearly. As for property, update the Estate Plan frequently. Carefully outline your trust documents. Retitle your financial accounts and fund your trusts so that they are as specific as possible. You are the primary trustee until you can no longer manage that role. If you have an Irrevocable Life Insurance Trust (ILIT), make sure the policy pays out the trustee of your ILIT. If you do not have a will or a living trust, you assets will belong to the state.
2.Decide: Trustee, Executor, or Guardian
Not knowing who to choose or trust to act on your behalf should not be holding you back from creating your Estate Plan. You can always appoint an attorney and change it later. It may help to remember that you can change the person listed in your Estate Plan at any time if you later find someone that is better for the job.
There are two types: Exemption Equivalent Credit and Credit Equivalent Trust.
Exemption Equivalent means that you can give up to $2 million dollars without being taxed - be it your loved one or your favorite organization. However, if you want your spouse to make the most of the money, you should consider the Credit Equivalent Trust (also know as a "B Trust"). Both you and your spouse can set up this trust, which can then be valued up to $4 million dollars total and not be taxed.
Last but not least, make sure you talk to your family before and/or after you write your will. Many a good tale has been told by Hollywood over the tensions that arise when a will is read. Most of the problems can be averted when explanations are given as to why you have written the will that way.
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