Our readers may not be aware it, but more changes may be coming for the estate planning world, even after the "fiscal cliff" changes. The recent changes, as we've mentioned before, involved some rather positive changes in the arena of estate tax and gift tax. Now, there is a lifetime exemption amount of $5 million, adjusted annually for inflation.
In our last post, we began discussing the importance of incorporating strategies for protecting one's wealth from liabilities within the estate planning process. Here we'll look at some recommendations to help out readers get started with this process.
Estate planning is a multi-layered process that involves not only deciding how assets will be disposed, but also protecting one's estate from losses from liabilities against the estate. With more and more Americans carrying debt into retirement, it is becoming increasingly common for people to leave behind liabilities that can clean out their estate.
In a recent post, we brought up the importance of including digital assets in estate planning. As we noted, a little planning in this area can go a long way toward making things easier for loved ones.
In our last post, we began looking at some of the ways the recent fiscal cliff deal has changed the face of estate planning. In this second part, we'd like to offer some suggestions for specific strategies folks might wants to consider when engaging in estate planning this year.
The recent fiscal cliff deal was a big deal in the estate planning world. In addition to setting the federal estate tax exemption amount permanently at $5.25 million-to be adjusted annually for inflation-the recent fiscal cliff deal also moved the federal estate tax rate from 35 percent to 40 percent. Married couples may pass on $10.5 million free of estate tax, and spousal portability permits a surviving spouse to use any remaining portion of their deceased spouse's federal estate tax exemption amount.
As more and more people acquire digital assets the need to protect these assets is one of the fastest growing areas of estate planning. These include email, Facebook, and Twitter accounts, as well as personal web pages and other online property. Of course, the most valuable digital assets for most people will be their bank and financial accounts. Nowadays more people are receiving only electronics statements, which can make it difficult for one's executor and heirs to locate all your assets and manage them at your death.
Battles over control of trusts and estate are not reserved to families where billion dollar fortunes are at stake. Even families with modest wealth can experience legal complications. Perhaps this is why the choice of whom to select as executor or trustee is a very important aspect of good estate planning. When somebody is chosen who is not right for the job, trust funds may become spent in legal fees and court battles, making for less to go around at distribution.
Many positives have come about as a result of Americans' increased involvement in estate planning and the necessary preparation for what happens to their wealth, property, and business(es) after they have passed away. Trusts, an incredibly useful means of keeping future generations' assets secure have become increasingly common, and many families have benefitted from parents' heightened familiarity with them.
In some not so happy news, Georgia has been listed last among states with concerns to the overall financial security of its residents. It has been estimated by the Corporation for Enterprise Development, a think tank from the nation's capitol, that 56 percent of the state's residents do not have adequate savings to cover financial emergencies or to save for the future.