Gifting is a way to reduce your estate by passing on property to others while you are still alive. Individuals are allowed to gift up to $13,000 in property to an individual per year. You may make as many $13,000 annual gifts as you wish to any number of individuals, without being required to file a gift tax return. For more information on the basics of gifting, read this Financial Strategy.
If your loved ones’ financial situation would be severely impacted if you were to die, chances are you need some life insurance. Life insurance can also be used to cover short-term expenses such as funeral arrangements, taxes and debts. For more information on using life insurance as part of your estate plan, read this Insurance Know-How.
A successful estate plan takes more than good intentions. If you do not have a Will in place, a nameless, faceless court will decide how your assets will be distributed. This is one of many pitfalls you could face if you do not revisit your estate plan, as your family situation or federal and state laws change. For more information on areas you should consult your estate planning attorney or tax adviser on, read this Financial Strategy.
Uncertainty overshadows the entire estate planning process including the changing tax laws and the value of your estate when you die. To combat uncertainties when developing an estate plan, you should realize that an estate plan is not a one-time endeavor. Rather, it is a plan that should be flexible to accommodate both lifestyle and law changes. For more on building flexibility into an estate plan, read this Financial Strategy.
For a minor to own investments in his or her own name, a custodial account must be used. A custodial account is established through the Uniform Gift/Transfer to Minors Act and allows a custodian to control a savings account until the child reaches the age of majority, when the account becomes the sole possession of the child. For more information about custodial accounts and to learn about some the advantages and disadvantages, read this Financial Strategy.
When dealing with the validity of a Last Will and Testament, cases such as these go to the Probate Court. Assets involved can be divided into probate and non-probate assets. For more information on the probate process and to determine which type of property you may be dealing with, read this Financial Strategy.
A Living Will is a document that expresses a person’s desires and preferences about medical treatment in case he or she becomes unable to make their own decisions. The difference between a Living Will and a Will is that a Will takes effect upon a person’s death, while a Living Will is used to protect assets that could be drained for medical expenses. For more on Living Wills, their benefits and the rules regarding their use, read this Financial Strategy.
By using the Gift Tax Exclusion in your estate and income tax planning, you can give up to $12,000, per resident, per year, free of gift tax. This tax rule allows you to ensure the financial security of your family and loved ones. For more information about how to take advantage of a gift-giving program, read this C.P.A Insight.
We often talk about life events that trigger financial decisions. However, many of these same events are reasons to update your Will.
