Estate Planning
Your Will
A will is a legal document that transfers what you own to your beneficiaries upon your death. It also names an executor to carry out the terms of your will and a guardian for your minor children, if you have any.
Living Trust
Trusts are used to maintain control and disposition of assets after death, and some can be used to minimize the estate tax impact of property transfers. The difference between a revocable and irrevocable trust is whether the trust creator can change or terminate the trust. In the revocable trust the creator can change the terms and conditions of the trust, or even eliminate the trust altogether. An irrevocable trust, on the other hand, cannot be altered once established.
Gifting Strategies
The federal government imposes a substantial tax on gifts of money or property above certain levels. Without such a tax someone with a sizable estate could give away a large portion of their property before death and escape death taxes altogether. For this reason, the gift tax acts more or less as a backstop to the estate tax. And yet, few people actually pay a gift tax during their lifetime. A gift program can substantially reduce overall transfer taxes; however, it requires good planning and a commitment to proceed with the gifts.
Living Will
Just as a will becomes the governing entity for your estate after you die, a living will will make your wishes clear and legally binding in the event of a devastating illness or injury. A living will is often referred to as a health care power of attorney. In it you state how you should be treated in the event of a terminal disease, severe illness, or tragic accident. By giving such directions when you are healthy, your relatives wont have to make difficult decisions on your behalf, and you'll receive the type of care you desire.
|
