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Who needs an estate plan?Estate planning is not just for the rich. Almost everyone ought to have an estate plan set up, even if you dont possess substantial fiscal wealth. Some experts recommend that a moderate estate contains a higher need for thorough preparing to ensure that your resources are better safeguarded. Undoubtedly significant estates have need for estate planning.While there are certainly many economical rewards to estate planning, additionally, there are several important aspects of estate planning apart from wealth preservation, transfer of wealth, and tax savings. Your own personal circumstances will shape the amount of complexity needed.

A tremendous percentage of Americans dont possess even the most basic estate planning documents, such as a will to direct disposition of their assets, or even a living will, medical power of attorney, or healthcare directive in order to safeguard them if they’re incapacitated. 65% of People in the usa dont have a will according to a survey done by Harris Interactive and reported by Forbes. Even less Americans have living wills set up.People with children, regardless of their own financial situation, should have guardianship documents nominating guardians for young children in case something happen to the parents.Most of the respondents foolishly believed that those without large assets didn’t need to plan.

Some of the key benefits of estate planning include:

Control of property during lifetime.

Transfer of wealth/assets to whom you want, how you want, when you want.

Peace of mind.

Cost savings.

Privacy.

Considerable tax saving potential.

Preservation of a legacy (encourage family values).

Maximize proceeds from life insurance and retirement and investment accounts.

Disability and health care planning.

Charitable gift planning.

Asset protection planning.

Business succession planning.

A number of the key risks of not planning include:

Probate – a time consuming, inefficient, emotional, and often costly process managed by the courts in which your assets may not be distributed in accordance with your desires.

Lost opportunity to preserve assets.

Family infighting.

Legal uncertainty.

Should you become disabled, a court must appoint a guardian and/or conservator over your care or the care of your assets, which is time consuming and may not be the person you would have chosen.

Court appointed guardianship of minor children.

Potentially higher taxes.

Children burdened with your estate planning.

Inability to maintain standard of living.

Randall Sparks JD, LL.M., a Utah estate planning attorney at Randall Sparks Law, P.C. carries a specialized practice centered on the estate planning needs of people of modest wealth as well as people that have considerable prosperity. Every person circumstance requires estate planning especially designed to those personal needs. Common planning strategies consist of wills, pour-over wills, living wills, medical powers of attorney, advanced healthcare directives, financial powers of attorney and revocable trusts, also referred to as living trusts. Randall Sparks Law, P.C. also provides more advanced planning techniques where appropriate. More advanced estate planning techniques may include the use of irrevocable life insurance trusts (ILITs), domestic asset protection trusts or intentionally defective grantor trusts (DAPTs or IDGTs), special needs trusts, special power of appointment trusts, and business planning, including business formation and the use of limited liability companies, corporations, and buy-sell agreements.

Randall Sparks Law, P.C. is devoted to providing Utah customers with the unique planning they need based on their individual situation. Some clients need quite simple plans and some require more advanced planning. Regardless of your circumstances, Randall Sparks Law, P.C. ensures that you get professional estate planning assistance and service. Let Randall Sparks Law, P.C. lift the weight off your shoulders so you can carry more important things.

Estate Planning Why You Need To Be Checking Your Plan

Estate planning has always involved a certain amount of forward projection when it comes to future events. Given this, most people can go a few years without looking at their particular estate plan because things just dont change that much. This is not the case this year.

2010 is the end of an epoch when it comes to estate planning. If you have the same estate plan at this time in 2011 that you have now, you have a big problem. To cut to the chase, your family and heirs could lose massive amounts of your estate if you dont take action. What is all the ruckus about? The estate tax.

President Bush left us with many things. You might think them good or you might think them no so good depending on your political bent. One of the factual items was known as the Bush tax cuts. A key part of these taxes was the slow elimination of the estate tax. It was whittled down year after year until the tax rate actually became zero percent this year.

As you might guess, it is easy to put together an estate plan when the tax rate is zero percent. Alas, things become much more complex at the end of 2010. The Bush tax cuts will expire. There is political pressure to continue most of them given the Great Recession, but the estate tax is not included in this debate.

So, what will happen in 2011? It appears as though the estate tax will return to the rate it was at before the Bush tax cuts. What was that rate? Make sure you are sitting down. It was 55 percent. Keep in mind, this is only the federal tax rate. It does not include the state tax rate and any capital gains or income tax issues that arise with things like retirement accounts.

2010 is the proverbial Holy Grail year when it comes to estate planning. Alas, 2011 is shaping up to be the other side of coin. Make sure you dont get caught out when the tax changes come see your financial advisor today.

Copyright 2006 Ronald Hudkins

In the not overly distant past, the writings of the testator were the only evidence of his or her intentions and mental capacity. Undue influence was harder to defend against when the only evidence was the testators writings and the recollection of those around them. Imagine the scene, the packed court room (perhaps I have a flair for the dramatic), the testimony as to the deceaseds mental health and the influence exercised over them by their final caretakers and close family members made the testators mental health and the influence of others over them a matter of the testimony of the living and those often involved in contesting or defending the will.

But new options exist today that make it far easier for the testator to present evidence after they have passed away. The first question to be asked in a contest involving mental capacity is that of mental deficiency. Mental deficiency is demonstrated by the testator not being able to comprehend what he/she owns, to whom he/she is giving it, and how it will be transferred in addition to the overall impact such transference will have on their estate as a whole. Previously this could only be done in writing and it was often suspected that the attorney representing the deceased might have helped that writing have all the necessary components, rendering the doctrine more flexible and open to jury or judicial interpretation than a clear matter of fact.

However, today the process can include having the testator explain on video tape what the asset is, how it is to be transferred and to whom, and the overall implications of that transfer to the overall estate. It is easier to see the deceased, to see whether he or she seems to understand all the implications and to see whether or not he/she is the type of person who is weak willed enough to be susceptible to undue influence. In addition, protecting your client by having them explain it in their own handwriting and, on a couple of different occasions, on video tape alters the essential landscape of the court room proceedings by making the deceased a witness.

In addition, it is often useful to send a client to a psychiatrist to verify their mental health and acuity on an ongoing basis. This is evidence that those contesting the testamentary instrument will not easily be able to counter, because they will not have their own psychiatrist who has had access to the testator. This is another excellent card to have in your arsenal as an attorney in order to protect your clients interests which again alters the landscape of the proceeding if the will is contested. Questions as to whether a client is mentally capable of understanding his/her bequests, the implications of those bequests, and the relation of those bequests to the rest of his/her estate as well as questions regarding to what extent, if any, their own personality was waning and susceptible to undue influence can be answered in different way. The more the judge and jury are able to see the testator, how they behaved, and how lucid and in control of their faculties they appeared to be, the more the trial regarding wills shall depend on a more direct perception of the testator rather than one provided by second hand accounts. The wise estate planner will use video tape in conjunction with psychiatry and standardized psychiatric tests to show that the testator knew exactly what he/she was doing and will not be hamstrung, as in days past, by the perception of others.

If you think the tax code is difficult to deal with when you are alive, you should see what happens when you die. The death tax is, ironically, zero percent in 2010, but it bumps up to a whopping 55 percent in 2011 and that doesnt take into account state taxes. Most people try to deal with these tax issues by pursuing estate planning, but you have to get it right to avoid problems.

Estate planning is the act of positioning your estate in a manner that will minimize or eliminate the taxes you owe on it. Common tools used in an estate tax plan include irrevocable life insurance trusts, A-B trusts, succession plans, buy-sell agreements, wills and so on. When combined in the right way, these instruments can be used to put together a plan that results in the vast majority of your estate going to your family instead of the government. For most people, that is the goal.

Sadly, many estate plans fall apart before they are activated. This leads to conflicting developments that not only dont avoid major taxes, but may invite them. There are two primary reasons this disaster happens.

The first is very simple. Life is not static. Things change over time. An estate plan is based upon things as they are at the time it is created. If you did your estate plan 10 years ago, you life has undoubtedly changed fairly dramatically. The plan probably no longer fits your needs and chaos can occur when you pass on. Updating an estate plan every few years is vital if you want to get your moneys worth.

The second problem is known as the incremental change. This occurs when you change one aspect of the estate plan without making sure it is in harmony with the rest of the plan. A classic example is a family business. Lets say you put a succession plan in place to pass the business to your second son. Five years later, the son indicates he doesnt want it and is going in a different direction. Thats okay because now your daughter wants to run it. Well, if you dont change all the documents making up the succession plan, the business will be left to the wrong heir. Cant they just transfer it? Yes, but not without some horrendous tax payments coming do.

Nobody likes to think about dying, so estate plans tend to gather dust in a drawer somewhere. Dont make this mistake. Update your plan every few years or if some major event happens in your life. Fail to do so and you may very well end up leaving the vast majority of your estate to the government.

I have been practicing exclusively in the area of estate planning for over 27 years. Yet, last week a questioned posed by a young couple seemed to resonate in my mind like never before. “What is the number one benefit of doing a trust?” My mind quickly raced to the 1980′s movie “City Slickers” when the old crusty cowboy said to Billy Crystal, the city slicker, that he must find “just one thing” that is important to him in life and use that as a motivation to have a happy and successful life. This line made me realize that the “just one thing” in estate planning, like the movie, is different for each person. The true answer is the quintessential clich, “it depends”. The purpose of this article will list some of the most important factors that people should consider. In the end, whatever your “just one thing” is should motivate you to take action and provide “Peace of Mind” for your loved ones. Avoiding Probate – This seems to be the relevant factor cited most frequently, although I disagree that it is the most important reason to plan. Probate in Arizona is not the costly, burdensome procedure that it is in some states like California or New York. Yes, it does cost some money, but in most cases the cost is only a few thousand dollars. The severity of probate depends largely on the make-up of the assets. The more “complicated assets” you have (ie Oil Leases, closely held family businesses, Partnerships, fractional interests in Real Estate, etc.) and the more states in which you own real estate, then you drive up the “Probate Meter” very quickly. If you own real property in more than one state, you will have to have a probate proceeding in each state, which means you will probably need an attorney in each state. But, if your assets are “simple”, (a house, a car, some CDs) and primarily located in Arizona, then the “Probate Meter” is very low. Saving Taxes – People have heard this phrase over and over again in newspaper ads inviting people to public seminars put on by a “national expert” that nobody has ever really heard of. But, how does a Trust really help to save taxes? Under today’s tax laws, a common Revocable Trust does not save taxes for most people. First, a Trust doesn’t save any income taxes. The Trust is ignored for income tax purposes and all of the income generated by the Trust is taxed to the individual Grantors of the Trust as usual. Also, for a single person, a Trust does not save any estate taxes. But, for a married couple, a Trust can save estate taxes. Most married couples have a Revocable Trust, that splits into an “A” and a “B” trust at the death of the first spouse. The primary reason for this split is that it guarantees that the couple will get two exemptions to apply against the estate tax. One exemption for the “B” trust when the first spouse dies, and then a second exemption against the “A” trust when the surviving spouse passes. Without an A/B trust, it is possible that the exemption of the first spouse could be wasted. But, since the federal estate tax exemption is now set at $5 million, most couples only need one exemption anyway. So, in the end, for probably 95% of married couples, having a trust will not save any estate taxes. Now, this is true as to the Revocable living trust. Don’t confuse this with the 4 or 5 other “specialty trusts” that have the specific purpose of saving estate taxes. Examples of a “specialty trust” would be an Irrevocable Life Insurance Trust (designed to keep life insurance out of the estate tax system) and a Qualified Personal Residence Trust (designed to keep the primary and vacation residences out of the estate tax system). Restrictions and Incentives for Spouse – A well drafted Trust should contain provisions as to what happens to the assets of the first spouse to die, if the surviving spouse remarries. Most clients want to adequately provide for their spouse, but they don’t want to provide for their spouse’s new husband or wife. Also, to what extent can the surviving spouse change the estate plan, after the death of the first spouse, to disinherit the children. My experience is that most spouses tend to remarry, and most of the time, that new spouse will also have children. Now, we end up with a “blended family”. Over time, the surviving spouse feels love and loyalty to the new spouse, and perhaps the new stepchildren. We probably all agree that the surviving spouse should be able to do what they wish with respect to their community property half interest in the asses. The more difficult question is whether the surviving spouse can also control the ultimate disposition of the deceased spouse’s community property half of the trust and make provisions for the new spouse or the new stepchildren out of the deceased spouses’s half of the trust. Restrictions and Incentives for Children – The key question here relates to the timing in which a child should gain unrestricted access, an outright distribution, to the assets after the death of both parents. We would all agree that if a child is a minor, then the assets should be controlled and restricted by an independent trustee for a period of time. What we may disagree on, is the appropriate age in which all restrictions and the independent trustee should be removed. Some clients say age 25, some say 30, and I have had many that say 50 or 60. My experience is that the older my clients are, the higher they will set the ages for their children to gain control. For example, if the kids are minors, then most couples will set the restriction to be lifted at age 30. However, if the couple is much older, and the kids are already over age 30, then these couples may set the restrictions to age 40 or 45. We may also want to build certain “incentives” into the estate plan. A common incentive is “if you earn a buck, then the trust will pay you another buck”. So, you create an incentive for a child to go out and earn a living. Over the years, I have seen the destruction that is brought to a “trust fund baby”. Money and inheritances can ruin a child and ruin a life. That is why many wealthy people will leave large portions of their wealth to charities, instead of their children (and yes, there are income tax advantages and estate tax advantages of doing this, but the primary reason would be to encourage the child to have a productive life). You may also want to provide incentives depending on if a child graduates from college or achieves some other educational benchmark. I do see the risk of using the trust as a “carrot” that is dangled in front of a child to be manipulative. But, some well thought out incentives can really go a long way to help a son or a daughter cope with the vicissitudes of life and be blessing to them, and not a curse. Asset Protection – For example, having an A/B Trust as described above, can make sure that the assets of a deceased spouse are not subject to the creditor claims of the surviving spouse. As a firm, we are recommending A/B trusts for this reason more than the reason discussed above where an A/B trust can provide two estate tax exemptions. In variably, the surviving spouse ends up in a nursing home that chews up the net worth very quickly. So, having half of the estate in a “B” trust, protected from the creditors (ie nursing home costs) of the surviving spouse makes a lot of sense. Also, a good estate planning attorney can structure the inheritance for the children, to remain in trust for their lifetime. This will protect the inheritance from the potential creditors of the child such as divorce, bankruptcy, lawsuits, etc. My estate plan is structured that upon the deaths of my wife and I, our estate will be divided out into separate trusts to provide one trust for each of our children. We have an independent trustee and some incentives in each trust. At age 35, the child has the right to become his or her own trustee. So, in essence, the child can now take from the trust whatever the child wants for his “health, education, support and maintenance”. The child is also free, as the trustee, to invest the trust assets into a beach house, a cabin, or any investment that he or she chooses. Meanwhile, if that child divorces, his or her spouse cannot touch that trust. Also, if that child files bankruptcy, then the creditors cannot reach the assets in this trust. I call this a “wrapper of protection” that we can place around the assets which gives the trust “bullet proof” creditor protection to our children. It is also important to remember that a child cannot create his own trust to provide this kind of protection. The law in most states is such that a trust provides creditor protection only in cases where it was created by one person for the benefit of another person. In other words, the grantor or creator of the trust, cannot also be a beneficiary of the trust and achieve creditor protection. So, as long as the trust is created by a parent, for the benefit of a child or grandchild, it can have the creditor protection described above. Providing a Plan for Incompetency – As all of us age, we can see that our minds and our memories start to diminish. Most of the estate litigation that comes into our firm relates one way or another to the incapacity of one or both of the parents. When this happens we see many children turn against each other and a fight ensues as to what is in the best interests of mom and dad. Unfortunately, the children seldom agree as to what is best. So, a legal battle is waged to determine who has the control of the assets and who has the ability to make medical and financial decisions. Yes, some of these problems should be addressed in a Power of Attorney. But, Powers of Attorney were meant to deal with short term situations, not permanent solutions. It is much better to have a plan, drafted inside of the Trust, as to who will become in charge (“successor trustee”) when mom and dad are no longer capable. Also, to what extent will the Successor Trustee have a duty to give an accounting to all of the kids and keep them informed? Under what circumstances can mom and dad be moved out of state? What is the plan when the assets run out? Will mom and dad live in a nursing home? Keep in mind that someone over 75 is much more likely to become disabled and incompetent in the next 5 years then they are to die in the next 5 years. Then, couple this with the fact that the children are more likely to fight over issues as to what happens to mom and dad, then they are to fight over the inheritance if mom and dad die. Clients are much more likely to avoid all of these fights if there is a well drafted estate plan in place. Privacy – Many clients like the fact that an estate administered under a Trust is more likely to be kept private then an estate administered by the Probate Court. So, some of our clients will create a Trust for that simple fact. We have all seen the ads on TV where someone is talking about the real estate strategy of buying property from an estate. How do these professionals find the property and know what is in probate and what isn’t? The answer is simple, in many probate proceedings, an inventory is filed with the Court and this inventory is a public record. So, all that needs to happen is that you have a person sitting in an office, searching the probate records to find real estate. Then, it is also easy to find the names and addresses of the heirs. Now, if most of the heirs are out of state, and there is local real estate, then the magic is in the fact that these heirs are now “motivated sellers” and you can make a low ball offer. The bottom line is that the financial affairs of the decedent are now public records that can be easily searched from any computer. The creation of a Trust provides privacy and avoids this issue of privacy altogether. In conclusion, there are many benefits to estate planning. It is also true that there are many risks and problems that are created by not having an estate plan in place. The reason and benefit that is important to you will depend on your situation. In fact, I have listed the reasons that are least important to me first, and the reasons that are most important to me last. That is me, but is based upon 27 years of experience. You must decide what is important to you. But, in the end at least focus on the issues and plan for the inevitable. Early in my career I developed a “line” that I used in my public seminars. When the client said, “oh, I really don’t think estate planning will benefit me at all.” My response was “okay, put my business card on your refrigerator”. I said this tongue in cheek knowing that the few dollars the client should have spent on the creation of an estate plan would multiply into huge legal fees when the children would begin to fight trying to unravel the many problems caused by lack of planning, or poor planning. There is a reason that our estate litigation department is the fasting growing practice area of our firm. Hopefully, your family will not fall into this trap. Whatever your reason, or “just one thing” may be, use that as your motivation to create a quality estate plan. This will ensure invaluable peace of mind for you and also for your loved ones.

Planning ahead and making plans for you family is important. You need to set down who is going to take what but more importantly you need to provide a guideline for who you want to be in charge of your minor children. Its important to take care of making life easier when you pass by not letting your family have to deal with the courts trying to sort out your property and your minor children. Estate planning is doing more than just figuring out what youll do with your property its about taking care of your family.

There are a few things to consider when you are estate planning. The most important thing to remember is that you dont have to be rich to have something in place. Generally you hear about these being set up to protect the assets of the rich. While it might be true that the rich benefit from it, it doesnt mean that you have to be rich to put one in place. It will do your family a great benefit to have a plan in place that will help ensure that your family and financial goals are met after you pass away.

There are several elements to the estate planning. First you need to have a will. This lists the various assets you own and what you want done with them. Having one of these documents in place before you pass will save your heirs a lot of trouble during an already difficult time. Dying intestate, or without a will, means your assets will have to go through probate which can be a long drawn out process where the courts decide who gets what. Not only does a will sort out your assets it can help to determine who will be responsible for any minor children in your home. Losing a parent is difficult enough without the added stress of not knowing what will happen when the dust settles.

A trust is also part of estate planning. Again this isnt necessarily for the super-rich. You can set up a trust no matter your wealth level. What this will do, is give you the power to put conditions on how your assets are distributed. You can also but conditions on when your heirs receive their assets after you pass. This can be a certain number of days after you pass or even your heirs have to be a certain age before they can receive the property.

There is a lot to estate planning. You need to take the time and sit down to figure out what is the best course for you and your family. No matter whether you are doing a will, a trust, or a combination of the two its best to talk to your heirs before you pass. Let them know what is going on and why youve made the decision that you have. It can mean that there will be few surprises once youre gone and might help to alleviate any potential issues.

In this present world, taxpayers should plan earlier to take advantage of the recent tax planning measures. One of the best ways for tax planning is to get the help of an estate plan professional. Many people go for estate planning because they want the estate tax, imposed by the state government to get avoided. Putting an estate plan is the best way to reduce such estate tax. There are also other reliable means to attain taxation benefits such as buying a home, vehicle, getting a health insurance account or some new retirement plans. Also by donating a charitable account, you can completely hand-out your income thus receiving tax deduction.

By using the estate planning, which is one of the primary planning techniques, one can possibly eliminate the estate taxes. After experiencing a loss in income, most people get the advice of an attorney regarding estate planning. Estate plan sounds better when the beneficiary is a minor. A better estate plan provides safety for your properties and will be useful for both ourselves and our beneficiaries. Before opting for an estate plan, just make a rough calculation of your investments, properties and liabilities. This will help you know whether your estate is liable for such tax and can seek the help of your lawyer in advance. Not only estate plans are needed for financial reasons, but also for personal reasons. Such plans would take care of your family after your death.

The first step to start an estate plan is to make a quick calculation of your properties and accounts. Next you should decide who should be the beneficiary. Normally people would neglect such provisions as they think that these were of less need. Unlike that, you should have a strong decision on who should be your heir. The next step is to find a qualified and well experienced attorney. He will certainly help you creating the estate plan and also will guide you with necessary instructions. It is also much important to maintain and update your estate plan every year atleast to know whether any changes are required. With the help of estate planning, you get a systematic concept of financial dealings in life.

No one might have ever thought of what would happen if they die without making a will or estate plan. As per the law, the spouse or children will inherit the property. If the person doesnt have any children, the property goes to his parents or relatives. With the assistance of a lawyer, you could make your loved ones benefit from your properties as per your will. It is impossible for an estate planning attorney to write the same documents for both married and individuals. The cost for preparing an estate plan varies for each. Mostly clients go for cheaper fee, but such cases will not be reliable. To get one of the best tax planning technique, we should opt for a qualified and experienced estate planning professional rather than looking for the one who asks for a cheaper fee.

Do you need an estate planning lawyer to get your paperwork in order or should you try to DIY? Most experts advise individuals to hire a professional to get this legal paperwork set up. The benefits far outweigh the cost outlay. If these documents aren’t drawn up properly, it can cause multiple complications and years of pricey probate for your heirs. A couple of the main legal documents to get set up include your will and your power of attorney. Other helpful papers are called directives and letters of instruction. Here are some things to think about:

- Your will: A will does many things including name a manager of your estate or executor, lists your assets and property along with the individuals or charities you choose to leave them to and who should take care of any dependents. Dependents may be your underage kids, any disabled relatives and even your pets. If you don’t want to worry about these things or have your family members or friends squabbling over your belongings, you must have a will drawn up by your attorney.

- Power-of-attorney: There are various times in a person’s life when they need to have a power-of-attorney in place. Some of these are temporary such as giving the power to your spouse to sign in a real estate transaction if you’re out of the country. The one you need for your estate planning is a durable one that names a person you want to make certain decisions for you if you become ill and are unable to do so for yourself. This could include giving them access to your bank accounts or business dealings.

- Directives: Advance directives are called by a variety of names including living wills, healthcare powers-of-attorney and personalized directives. These are necessary for family members to make decisions about your medical care if you are somehow incapacitated. They can decide who your doctor will be, whether you should take specific medicines or be moved to another hospital. This may be a spouse, one of your adult children or your partner if you’re unmarried.

- Letter of instructions: A letter of instructions is an informal document that you can either write up yourself or have your lawyer oversee. It’s not given as much validity in court as a bona fide will but it’s helpful for certain situations. It may just be a list of instructions for your children or family member on how you want certain issues to be taken care of such as pet or vehicular care. If you want Fluffy to be fed only a certain brand of cat food or Rover to be walked off leash in the forest, this would be a good place to list these desires. If you want the car you’re leaving to your nephew to only be fueled with the supreme grade of gasoline, you can leave this instruction in this letter.

When a person gets their legal documents in order with the help of an estate planning lawyer, he or she can rest easy. It’s not about getting ready to die; it’s about relaxing about all these issues while you’re alive.

We pay taxes, based on income each and every working years of our lives, but according to Uncle Sam that’s not enough, so we pay taxes on death too. As far as taxes go, the estate tax has always been one of the least accepted forms of taxation. It is a serious revenue generator for the coffers of the US government. There has been much talk in recent years about the repeal of the estate tax, in order to do so we will have to find revenue for another tax source to replace the estate tax. This is easier said than done, so we wait. And we may be waiting for a long time, as there doesn’t seem to be a clear solution.
The estate tax is often referred to as the double tax, as it is a second tax. Essentially the estate tax is a form of double taxation, since it’s taxing money that really has already been taxed. Though it may not seem fair, it’s currently the way it is. The good news is that there are ways to avoid this estate tax, regardless of your tax rate. For the rich, the estate tax is not referred to as the double tax, but rather the volunteer tax. For these individuals who might be classified in the highest tax rate, are often well aware, when it comes to avoiding the estate tax.
All too often, it’s the middle class who aren’t well-versed in estate planning, and that end up footing the estate tax bill. This is common for even those that may be in a lower tax rate. All they need is a little bit of knowledge, and they too can eliminate the estate tax. To touch on a few of the techniques that the ultra rich utilize to avoid the estate tax, they often use rather mundane estate planning practices. This process doesn’t have to be a complicated one. The simplest step to reducing your taxable estate is gifting. You can eliminate large amounts of your estate by simply gifting. Current law allows for a rather large amount of money to be gifted, per individual. So, by gifting to family or predetermined beneficiary such as a charity you can start reducing your estate. And the beauty of gifting is that there is no limit on how many individuals you can give to. Why wait till you die to tax your estate when you can gift it to the same beneficiaries free from the estate tax.
The other popular method to reduce estate taxes is life insurance planning. Life insurance policies are utilized by the rich to find any estate tax bill that may be incurred by future generations. Life insurance can provide a large amount of leverage with a rather small initial outlay. A large estate, with potentially large estate tax consequences can be covered with a rather small life insurance premium. And because life insurance proceeds are not taxable, the life insurance payout is completely free of tax, when set up properly. This is why life insurance has been an integral part of estate planning for years. In fact, life insurance planning is worth taking a closer look at for your estate planning needs. This is not just exclusive to avoiding the estate tax. The synergistic effect, along with the tax advantage of life insurance, makes it an excellent tool for the transfer of wealth.

Following is an Estate Planning Checklist to help determine whether you may need estate planning. Please answer each of the following questions with a Yes or NO.

_____ 1. Has it been more than one year since you reviewed your estate plan, including your will, life insurance policies, and any other documents?

______ 2. If you or your spouse passed away today, how certain are you that your assets would go to the right people?

______ 3. Does your will leave property to someone other than your spouse?

______ 4. Do you have minor children or other people who depend on you? If you were not here to provide for them, would they be in financial trouble?

______ 5. If a death occurred and court approval was required to release accounts for working capital, could it disrupt a farm, business, or overall family financial well-being?

______ 6. If you became incapacitated, would your family have to go through court proceedings to carry on your affairs?

______ 7. Do you have children by a prior marriage or relationship?

______ 8. Do you own assets in your name alone? (Versus jointly with your spouse.)

______ 9. Is anyone other than your present spouse listed as beneficiary on any life insurance or bank account?

______ 10. Would you like to avoid probate of your estate?

______ 11. Might the total value of you and your spouses assets be large enough to create an estate tax liability? Include life insurance, pensions, real estate, investments, and all other assets.

______ 12. Do you plan to gift any property prior to death?

______ 13. If your current plan of distribution was followed, would assets have to be sold to pay expenses?

If you answered YES to any of the above questions, you may be in need of estate planning. YES answers indicate potential issues in the areas of estate taxes, attorney fees, the costs and delays of probate, or simply lack of a plan which would carry out your wishes. Estate planning allows you to make sure your property goes where you want it to go with no or minimal court involvement and attorney fees.