Selecting a trustee to manage trust property is a big decision, and it is important to make the right one. Because acting as trustee requires a significant amount of time and some knowledge of tax law and money management, not everybody is fit for the task.
Estate taxes are an important part of estate planning. On the one hand, there is the task of doing everything possible to minimize estate taxes. Various tools and techniques are used for this purpose. On the other hand, there is the task of proving the funds to pay for any estate taxes that are unavoidable. People sometimes overlook this latter task.
In our previous topic, we began by pointing out the importance of doing estate planning, no matter who you are. Both the wealthy and the not so wealthy can benefit from appropriate estate planning. Here we'd like to point out the importance of not considering estate planning a task to complete and forget.
As our readers may have heard us mention before, the end of 2012 will usher in big changes for the gift and estate tax regime. At present, taxpayers have the opportunity to pass on just over $5 million in wealth, free of estate tax. In 2013, that number is set to change back to $1 million, unless Congress takes action.
Our Alpharetta readers may have heard of asset protection trusts, or self-settled trusts, in the context of estate planning. Self-settled trusts are those in which the grantor and the beneficiary are the same person. Such trusts receive the type of protection from creditors normally given to other types of trusts while allowing the grantor to maintain control of the assets.
In our previous post, we began speaking about some uncomfortable yet important questions that can come up in the estate planning process, and the need to address these questions. As we noted, this is not always easy to do, but well worth it.
A large part of doing estate planning is knowing the right questions to ask. Sometimes these questions can be uncomfortable, but asking them is the first step to coming up with strategies to address them.
One of the great functions of trusts in estate planning to is minimize estate taxes. For married couples, there is usually a concern that the surviving spouses have enough money to last until their death. One of the techniques married couples often use is to include a formula clause in their trust which specifies that their children get the amount of assets equivalent to the federal estate tax exclusion, while the rest will go to a marital trust for the surviving spouse.
In our last post, we began speaking about a number a steps one can take to avoid a situation where long-term care expenses get out of hand and leave a family financially overwhelmed. We already mentioned the importance of taking time to sign an elderly parent up for Medicaid and Medicare, as well as obtaining a durable power of attorney.
Medicaid planning and long-term care planning is certainly an important aspect of estate planning, and various strategies can be employed to ensure that one is able to take full advantage of the program. But even when an elderly parent is able to obtain Medicaid, costs for long term care are not completely taken care of, and family can end up being responsible for paying those costs.