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What if the unthinkable happens and your spouse dies unexpectedly? Would you be prepared to cope emotionally and financially? As the surviving spouse, you’ll face several tasks and challenges. First steps firstBy no means complete, the following are areas that will need to be addressed: Death certificates. One of the first things to do is obtain death certificates, which you’ll need to provide for various dealings with financial institutions and...
Read moreAn annual estate plan checkup is critical to the health of your estate plan. Because various exclusion, exemption and deduction amounts are adjusted for inflation, they can change from year to year, impacting your plan. 2019 vs. 2018 amounts Here are a few key figures for 2018 and 2019: Lifetime gift and estate tax exemption 2018: $11.18 million 2019: $11.40 million Generation-skipping transfer tax exemption 2018: $11.18 million 2019: $11.40...
Read moreEstate planning aims to help individuals achieve several important goals — primary among them, transferring wealth to loved ones at the lowest possible tax cost. However, if you have creditors, you need to be aware of how fraudulent transfer laws can affect your estate plan. Creditors could potentially challenge your gifts, trusts or other estate planning strategies as fraudulent transfers. Creditor challenges Most states have adopted the Uniform Fraudulent Transfer...
Read moreA revocable trust isn’t effective unless you fund it by transferring ownership of assets to the trust. Transferring a vehicle to it, however, brings a unique set of issues. If you still owe money on an auto loan, the lender may not allow you to transfer the title to the trust. But even if you own the vehicle outright, there are risks to consider. For example, as owner of the...
Read moreIf your son or daughter currently is home from college on winter break, now is a good time to sit down and discuss a few estate planning documents he or she should have at this stage of life. Let’s take a closer look at four such documents: 1. Health care power of attorney. With a health care power of attorney (sometimes referred to as a “health care proxy” or “durable...
Read morePortability allows a surviving spouse to apply a deceased spouse’s unused estate tax exemption amount toward his or her own transfers during life or at death. To secure these benefits, however, the deceased spouse’s executor must have made a portability election on a timely filed estate tax return. The return is due nine months after death, with a six-month extension option. Unfortunately, estates that aren’t otherwise required to file a...
Read moreIf you or one of your adult children is getting married, you may be concerned about protecting your family’s assets in the event of a divorce. A prenuptial agreement can be an effective tool for overriding marital property rights and keeping assets in the family. But these agreements have disadvantages. For many families, a better alternative is a domestic asset protection trust (DAPT). Why assets need protection The laws regarding...
Read moreSometimes estates that are large enough for estate taxes to be a concern are asset rich but cash poor, without the liquidity needed to pay those taxes. An intrafamily loan is one option. While a life insurance policy can be used to cover taxes and other estate expenses, a benefit of using an intrafamily loan is that, if it’s properly structured, the estate can deduct the full amount of interest...
Read moreEstate planning typically focuses on what happens to your children and your assets when you die. But it’s equally important to have a plan for making critical financial and medical decisions if you’re unable to make those decisions yourself. A crucial component of this plan is the power of attorney (POA) ? specifically, a nonspringing POA. POA defined A POA is a document under which you, as “principal,” authorize a...
Read moreYour estate plan shouldn’t be a static document. It needs to change as your life changes. Year end is the perfect time to check whether any life events have taken place in the past 12 months or so that affect your estate plan. And the plan should be reviewed periodically anyway to ensure that it still meets your main objectives and is up to date. When revisions might be needed...
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