In this post, we are going to examine the unlimited estate tax marital deduction. However, before we get into this specific area, we should provide a broad overview of the federal estate tax itself. The federal estate tax is imposed on wealth that is being transferred that exceeds a particular amount. This threshold is called the estate tax exclusion. The amount of the exclusion has varied significantly over the years, so the current numbers we are going to share are subject to change. In … [Read more...]
Probate 101
Estate planning is something that most people are not particularly anxious to think about. But at the same time, as they say, no one here gets out alive. Going through life without making any preparations for something that is definitely going to take place really doesn’t make a lot of sense. If you do decide to put the wheels in motion and begin to look into the process of estate planning, you will hear about something called probate. When you use a last will to express your final wishes, … [Read more...]
Estate Planning Solution for a Spendthrift Heir
A lot of people are under the impression that a last will is the most simple and efficient estate planning tool. They assume that trusts are only useful for very wealthy individuals that have complex inheritance planning concerns. In reality, the administration of a will is actually quite complicated, and there is a type of trust that can benefit people that are not among the financial elite. When it comes to the complications, the process of probate is the culprit. If you were to create a … [Read more...]
Genworth Unveils 2019 Long-Term Care Costs
When you are looking ahead toward your retirement years, you may focus on the initial stage, when all the fruits of your labor can be harvested. You can enjoy leisure activities, spend time with family members and friends, and cross things off your bucket list. This stage of your life can certainly be very special, but it is also important to consider the twilight years that will follow. The Next Plateau As time goes on and the years pass, you may start to feel a lot less energetic than you … [Read more...]
Can a Trust Be Changed?
People that do not have a strong understanding of the subject often assume that trusts are to be avoided, because you make permanent decisions that you could never change when you establish a trust. What if you convey assets into a trust and you need the money later on for one reason or another? This sense of trepidation is understandable, but you do not necessarily surrender control of assets that you place into a trust. There are irrevocable trusts that cannot be dissolved or rescinded, and … [Read more...]
Avoid Probate With a Living Trust
In a previous post, we looked a few different types of asset transfers that organically take place outside of the probate process. We did not explain why probate is something that you may want to avoid because this is a two-part series on this very important piece to the estate planning puzzle. Before we look at the drawbacks of probate, we should emphasize the fact that it is not inherently negative, and it serves a purpose. It would not be fair for the people named in a will to receive … [Read more...]
What Is a Step-Up in Basis?
People that have not looked into the subject before are often very pleasantly surprised when they learn about how taxation applies to inheritances. Generally speaking, you do not have to report an inheritance on your income tax returns. There is a federal estate tax, but most people don’t pay it, because it is only applicable on transfers that exceed $11.4 million. There is a state level estate tax in Vermont with an exclusion of $2.75 million. It has been estimated that fewer than 75 estates … [Read more...]
When Will My Heirs Receive Their Inheritances?
When you are planning your estate, you have options. There are various different ways that you can get inheritances into the hands of your loved ones after you pass away. It is possible to be proactive about the facilitation of timely asset transfers. If you were to use a last will as your primary asset transfer vehicle, you would name an executor when you create the document. This person would serve as the estate administrator. After your passing, the will would be admitted to probate. … [Read more...]
A Family Limited Partnership Can Protect Assets
They say that we live in a litigious society. There are always individuals out there that are poised to file lawsuits against people that they perceive as “deep pocket targets.” Clearly, asset protection is important to safeguard your own interests, and there are legacy planning implications as well. Family Limited Partnerships One legal structure that can be the ideal asset protection tool when certain circumstances exist is the family limited partnership (FLP). The best way to explain the … [Read more...]
Charitable Giving Can Punctuate Your Legacy
Legacy planning is a more comprehensive and complete form of estate planning. When you craft your legacy, you carefully consider the way that you want to be remembered after you are gone. If you are in a position to do so, you may want to be known for your generosity. Indeed, there are a number of different ways that you can provide for charitable causes and institutions that are meaningful to you when you devise your legacy plan. Private Foundations If you have philanthropic aims, you may … [Read more...]
