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.
The purchase of life insurance requires consideration of a number of factors, including costs and terms; type of insurance plan; and how much to purchase. In terms of estate planning, another consideration is whether a life insurance policy can be a good vehicle for passing on one's wealth. And, if so, how?
In our last post, we began speaking on how trusts and LLCs can be used for real estate in planning one's estate. The topic is important, as failing to protect one's real estate from lawsuits and probate after one's death can create extra troubles and costs. These can be avoided by prudent use of a trust or LLC.
Asset protection, like Medicaid planning, is an important aspect of estate planning. In truth, Medicaid planning is a form of asset protection, which includes a number of other considerations like tax minimization, planning for special needs children, and ensuring avoidance of costly will contests.
Typically, one does not look to Hollywood for estate planning tips.
In our last post, we took a look at Grantor Retained Annuity Trusts and their effectiveness as a vehicle for reducing estate and gift taxes. Unfortunately, this planning technique and a number of others may soon be rendered much less useful if president Obama's recent budget proposal passes into law.
One of the many estate planning tools available, a Grantor Retained Annuity Trust (GRAT) is a trust to which assets are transferred for a retained annuity, which is a periodic return of the assets with interest. In a GRAT, this return lasts as long as the trust's duration. These estate planning tools can allow for significant asset transfers to family and other loved ones with minimal or no gift tax consequences.
Estate planning is not necessarily a conversation people are excited to jump into. Thinking about finances, providing for one's family, and of course death can be discomforting and stressing for some. One good piece of news, however, is that the present environment is very favorable for estate planning, particularly for elderly individuals who may die in the next year.
Are readers are already familiar with the uncertain state of estate planning beyond 2013. Currently, the federal estate tax is set to go through some changes in 2013 unless action is taken before then. That means that until 2013, individuals are not subject to federal estate tax unless their estate exceeds $5 million, or they may give up to $5 million in gifts without paying federal gift tax. That amount is $10 million for couples.
In our previous post, we began looking at basic reasons for adults to think about estate planning, even young unmarried adults. As we noted, this week is National Estate Planning Awareness Week, and it is as good a time as any to start thinking about getting the wheels turning about how you wish to order your estate, if you haven't done so already.