djamal-soft
الخميس، 9 يناير 2014
I have been practicing exclusively in the area of estate planning for over 27 years. Yet, last week a questioned posed by a young couple seemed to resonate in my mind like never before. "What is the number one benefit of doing a trust?" My mind quickly raced to the 1980's movie "City Slickers" when the old crusty cowboy said to Billy Crystal, the city slicker, that he must find "just one thing" that is important to him in life and uses that as a motivation to have a happy and successful life.
While it may be trite to observe that no two individuals are the same, it is not a clich to say that everyone of us can benefit from estate planning tax advice, if only to learn that we will not have to worry because our estates will not be large enough that a tax is applicable. The estates of those just beginning their careers may not require a lot of estate planning tax avoidance measures, while the estates of their grandparents very well might.
Saving Taxes - People have heard this phrase over and over again in newspaper ads inviting people to public seminars put on by a "national expert" that nobody has ever really heard of. But, how does a Trust really help to save taxes? Under today's tax laws, a common Revocable Trust does not save taxes for most people. First, a Trust doesn't save any income taxes. The Trust is ignored for income tax purposes and all of the income generated by the Trust is taxed to the individual Grantors of the Trust as usual. Also, for a single person, a Trust does not save any estate taxes. But, for a married couple, a Trust can save estate taxes. Most married couples have a Revocable Trust, that splits into an "A" and a "B" trust at the death of the first spouse. The primary reason for this split is that it guarantees that the couple will get two exemptions to apply against the estate tax. One exemption for the "B" trust when the first spouse dies, and then a second exemption against the "A" trust when the surviving spouse passes. Without an A/B trust, it is possible that the exemption of the first spouse could be wasted. But, since the federal estate tax exemption is now set at $5 million, most couples only need one exemption anyway. So, in the end, for probably 95% of married couples, having a trust will not save any estate taxes. Now, this is true as to the Revocable living trust.
Central to estate planning is choosing people to make decisions for you both during incapacity and after your death. These people include trustees, guardians, agents, and beneficiaries. Make sure that you select an agent who knows you and your wishes well. He or she will speak for you when you cannot, so it is vitally important that he or she knows you well. Make sure you and the agent have a clear understanding of his or her role in your estate and that you have clearly communicated your desires.
A significant portion of your assets might be vulnerable to estate taxes after you die. However, there are ways to leave behind an estate without losing most of it to taxes. It is important that you consult with a qualified attorney to discuss the most strategic methods for establishing your unique plan. A well-crafted plan will ensure that your beneficiaries get the most benefit from your years of hard work.
Because life events, such as divorce, loss of job, etc., may change your assets, it is important to periodically revisit your plan to ensure that it is always current. Many people die without reviewing their assets, so their plans cannot be carried out as they had desired. By regularly reviewing your plan, you are able to help your beneficiaries inherit the assets you leave behind for them without having to fight for them in court or with other beneficiaries.
While it may be trite to observe that no two individuals are the same, it is not a clich to say that everyone of us can benefit from estate planning tax advice, if only to learn that we will not have to worry because our estates will not be large enough that a tax is applicable. The estates of those just beginning their careers may not require a lot of estate planning tax avoidance measures, while the estates of their grandparents very well might.
Saving Taxes - People have heard this phrase over and over again in newspaper ads inviting people to public seminars put on by a "national expert" that nobody has ever really heard of. But, how does a Trust really help to save taxes? Under today's tax laws, a common Revocable Trust does not save taxes for most people. First, a Trust doesn't save any income taxes. The Trust is ignored for income tax purposes and all of the income generated by the Trust is taxed to the individual Grantors of the Trust as usual. Also, for a single person, a Trust does not save any estate taxes. But, for a married couple, a Trust can save estate taxes. Most married couples have a Revocable Trust, that splits into an "A" and a "B" trust at the death of the first spouse. The primary reason for this split is that it guarantees that the couple will get two exemptions to apply against the estate tax. One exemption for the "B" trust when the first spouse dies, and then a second exemption against the "A" trust when the surviving spouse passes. Without an A/B trust, it is possible that the exemption of the first spouse could be wasted. But, since the federal estate tax exemption is now set at $5 million, most couples only need one exemption anyway. So, in the end, for probably 95% of married couples, having a trust will not save any estate taxes. Now, this is true as to the Revocable living trust.
Central to estate planning is choosing people to make decisions for you both during incapacity and after your death. These people include trustees, guardians, agents, and beneficiaries. Make sure that you select an agent who knows you and your wishes well. He or she will speak for you when you cannot, so it is vitally important that he or she knows you well. Make sure you and the agent have a clear understanding of his or her role in your estate and that you have clearly communicated your desires.
A significant portion of your assets might be vulnerable to estate taxes after you die. However, there are ways to leave behind an estate without losing most of it to taxes. It is important that you consult with a qualified attorney to discuss the most strategic methods for establishing your unique plan. A well-crafted plan will ensure that your beneficiaries get the most benefit from your years of hard work.
Because life events, such as divorce, loss of job, etc., may change your assets, it is important to periodically revisit your plan to ensure that it is always current. Many people die without reviewing their assets, so their plans cannot be carried out as they had desired. By regularly reviewing your plan, you are able to help your beneficiaries inherit the assets you leave behind for them without having to fight for them in court or with other beneficiaries.
About the Author:
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Advantages Of Investment In Real Estate You have full permission to reprint this article provided this box is kept unchanged.
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