SENIOR SIGNALS: Updating your estate plan when your finances change

Post by Mei Ling Lin

By Daniel O. Tully

In the recent economic downturn, many homes have lost considerable value and stock portfolios have plummeted. If this is the case for you, do you need to change your will? What if your income and assets have increased significantly? If your finances have changed markedly since you wrote your will, you should check your estate plan to see if you need to make any changes.

If your will or estate plan divides your estate into percentages for beneficiaries, then changes in value won’t affect how your estate is distributed. However, if you include specific bequests in your will, a fall or rise in your estate could have consequences. For example, if your estate plan gives $50,000 to your favorite charity and the rest of your estate to your children, a reduction in the value of your estate could mean your children won’t get as much as you intended.

A change in value of assets could also affect your estate plan if you intended to treat your children equally by giving them assets of equal value. For example, suppose your will gives your house worth $500,000 to your daughter and your stock worth $500,000 to your son. If the value of either the house or the stock portfolio increases or decreases significantly in value, your children will no longer receive equal gifts. It is also important to update your estate plan if the overall nature of your assets has changed. For example, if you sold the stock and bought real estate instead, this will affect the distribution to your children.

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Things need to know in the estate plan

by Mei Ling Lin

When you working on your estate plan, you need to clearly know about how do your make your estate more security, and how do you help your heir to avoid the estate tax after you die. Most of people misunderstand the rules in the estate plan documents that they sign. For example, you want to ensure that your wife and children can get specific amount of money after you die.

Also, you are afraid of your wife remarried to the gold digger, then your children may not have money for their future. Therefore, you need clearly understand how the rules affect your heirs. If you divorce, then you need make sure the names in the list of your heirs. Because you still can change the name of your heirs when you are live, but if you die, you cannot any change.

In addition, some people scared that their heirs need to pay a lot of estate tax, and after that, the heirs cannot get the amount that they give to the heirs. Sometime, the heirs cannot sell the non-liquidity estate as soon as possible, because it will take times to sell the real estate, like house or stock.

source #1 source #2 source #3 source #4

Why Estate Planning are important?

By YiLin Zhu

Most of us never like to think about estate planning. It seems morbid to think about demise. Since there is no one is prepared themselves for the worst thing in the family, so no one ever brings up estate planning as a topic to discuss about. However, estate planning takes an important part in everyone’s life. The correct way to define estate planning would be, pre-planning ones personal assets before any unfortunate happens.

Estate planning is more common in some developed western countries than most of the traditional valued countries, such as China, Korea and Japan. People from these countries will think it is bad luck to making estate planning while someone still alive or healthy. However, more and more law cases about unfairly-distributed heritage warned people from Asia that estate planning is necessary to them.

There are several benefits of making estate planning. First of all, it will help the testator distribute his or her asset completely based on their own willingness. And there will be a trustable agency taking care of the asset transfer. Secondly, once if the testator loses his or her ability of ideation, the agency still able to passes over his or her will which he or she made before. Finally, estate planning helps the testator’s heir reduced or even eliminates the death duty. Thus, making estate planning is a smart decision.

Sources #1; Source #2; Source #3.

Creating a Will

by Dan Hughes

A will is a very important document to have no matter if you are on your deathbed or in your early 40's.  It is important to make sure that your loved ones, friends and/or family, are protected in case of a serious accident.  A will, in legal terms, is a legal document that you use to name the family members, friends, and organizations you want to receive - either outright or in trust - the property you own at the time of your death.  No matter how many assets the deceased owns, a will is still a very important document to have in order to ensure that everything you own is distributed to everyone the way it should be. 

A good approach to beginning to create a will is to name one or more executors.  An executor is an administrator who acts as a personal representative and carries out the wishes expressed in the will.  Naming an executor is a very important part of creating a will because you want your assets in the hands of a person that you can trust.  In addition to appointing executors, a guardian for children, until they reach the age of eighteen, should also be designated.  This is probably the single most important thing a parent can do for his/her child or children. 

After a will is drawn up, it must be validated by a legal entity known as the probate court.  This entity approves the settlement of the deceased's assets, the payment of any debts, and the transfer of legal property to heirs.  A date must be set that the executor and probate court clerk's office agree upon, and the executor will appear before a judge on that day.  The judge will then look over the will and decide on its "genuineness."  Once this happens, the will is made public and open to inspection by anyone.

http://www.newyorklife.com/cda/0,3254,11275,00.html#1

http://www.pathtoinvestigating.org/investinggoals/estateplan/will/ig_will_041.htm

http://www.babycenter.com/0_why-every-parent-needs-a-will_353.bc

Limiting taxes during estate planning

By Angelo Orlando


Estate planning can be a very daunting and scary thing to do. But with a sound plan you can make this scary task manageable. A good place to start is to make a list of what you own and decide where these possessions are going and to whom (Keating). This lets everyone in your family know what they can expect from your estate. Next know some tax ramifications that can be associated with your estate. For example, you can give assets to your heirs tax free as long as they do not exceed 3.5 million (Keating). Another tax ramification dealing with your estate and especially your spouse is the “I love you will,” which says you can give an unlimited amount of your estate to your spouse without tax consequences. But, try and avoid this because this will defer the taxes to until your spouse dies (Keating). This is not a very effective planning tool. A third tax ramification to be aware about when planning your estate is the generation skipping transfer tax, which can be a very expensive tax. If you are planning in your estate to bequeath assets to your grandchildren you should know. A way to avoid this is to pay for such things as college room and board which can be done with out tax consequences (Bischoff). Understanding and becoming aware of these tax ramifications when preparing your estate can be very helpful and save you tons of money in the process.

http://www.smartmoney.com/personal-finance/estate-planning/the-grandparent-tax-12635/

http://www.smartmoney.com/personal-finance/estate-planning/estate-planning-without-anxiety/

Estate Planning; What I learned

When I first received the subject of Estate Planning, I was not entirely sure just what the topic meant. Estate planning is what a person engages in while they are making out a last will and testament. They determine what will happen to all of the assets they own and who will benefit from such assets. Therefore, estate planning is extremely important, if you want to leave specific individuals your assets, like your home, your vehicle(s) or any form of money, you will need to write a legal will and indicate your selected beneficiaries. Estate planning can be viewed as scary, or maybe even paralyzing. Even if you don’t own many assets, if you are the kind of person that wants to have a say for the things that they have worked so hard for their whole life, estate planning is for you. Creating a will can’t be done emotionally, but should rather be done slowly and thoughtfully.
Everyone has a unique situation, and everyone will have different thoughts/aspects of their will. While working with your attorney, you may have to answer close family questions that you may not feel comfortable answering. Choosing an attorney that you trust and are comfortable with is essential to creating the best possible will.

Created by: Joseph Owen

One of the most important steps in Estate Planning.

When looking at the concept of Estate Planning it is very evident that one of the most important things to consider is the Will. A will is a legal document that specifies how you want your property to be distributed upon your death. Why is this so important one would ask? Well, if you do everything perfect, when it comes to the whole concept of Estate Planning and then something where to happen to you, if you do not have a will then the state has a set of rules that must be followed to distribute your assets after your death.
Overall, if you don’t not have a will when you do pass away and the state has to divide up your assets there is a very good possibility that they will not be divided up the way that you would have liked for them to be. In most cases, your wife or spouse would get no more then half while the other half would go to the children. In the unfortunate event that you do end up dying without any living relatives, children or spouse then it would go into escheat. This means that the state government acquires the estate.
As you can tell it is a very important thing that make sure that your will is up to date so that you can leave your assets to the people that you really want to have them. If not there is no telling who will get what or even if the state will be the one dividing up your assets for you. This is a critical step in the process of estate planning and one that should never be over looked.

Written By: Lee Ruth

Reasons for Estate Planning

By Lindsay Chin

Estate planning is the process that involves “people- your family, other individuals, and in many cases, charitable organizations of your choice” (The State Bar of California 1). This process involves your assets, property, forms of ownership and title. Estate planning “is the process by which an individual or family arranges the transfer of assets in anticipation of death” (Cornell University 1). It aims to preserve the maximum amount of wealth possible for beneficiaries. All your assets should be included in your estate. Whether a person has large or small estates, whether they are “young or old, who has a family or owns property, needs an estate plan” (Dillard University 1). A good estate plan will allow a person to reach desired personal, economic, legal consequences, and personal objectives. They should plan who should manage their assets and make personal and health care decisions for you. In your estate planning it should include a will and trusts. A will is a “traditional legal document” (The State Bar of California 5). It should include the names of individuals who will receive your assets after your death, a trust, an executor who will be appointed to manage your estate, and any guardians for minor children. It requires knowledge in federal and state “estate taxation, wills, insurance, methods of owning property, forms of business organization, trusts, and more” (Dillard University 1). This way you plan for yourself, your family, and any others involved with your estate.


Sources:
http://topics.law.cornell.edu/wex/Estate_Planning
http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581&id=2206
http://www.dillard.edu/index.php?option=com_content&view=article&id=118&Itemid=149

Estate Planning: Trusts - Bloomberg: Your Money

By: Dan Hughes

Estate Planning: What You Need to Know

Post by: YiLin Zhu
By Paul Sullivan

Estate Planning rarely gets the attention it should get.

Saving for your children’s education, purchasing a second home, deciding when and how to retire — these are all topic that people talk about with their friends and their financial advisers. But deciding what happens to whatever is left of your money when you die is often passed over. It shouldn’t, though, because it is crucial to a financial plan.

But not discussing something that is going to happen will not stop it from happening. And at some point, someone is going to have to sort out your estate — regardless of how big or small it is. Here are some of the key issues that should be addressed: WILLS Everybody should have a will, and people who are married and/or have dependent children are inexcusably foolish if they do not. There are significant issues that only a will can clarify. One of the biggest is who will take care of the people you love, and how? You may have told your best friend that he will be the guardian of your children if you and your spouse die in a plane crash, but unless you spelled out your wish in a will, there is no guarantee this will happen. If both parents die, it will be up to the state to decide, and they will chose based on family.

If you say this is what you wanted anyway, you’re missing the point. Which parents would you want to raise your children — yours or your spouse’s? Or if it is a sibling, do you care if your children go to the wealthy one in Seattle whom you always fought with or to the financially strapped but loving one in Memphis with two children of his own?

Some may argue that wills are expensive. But there are plenty of online sites to help write a legally binding one for little cost. Two popular destinations are RocketLawyer and LegalZoom. If you are wondering what will happen to your money if you die without a will, go to mystatewill.com. It shows what happens to your assets in each state if you die without a will. The picture it paints can be scary and may convince the holdouts that paying a fee online or spending $1,000 for an actual lawyer to draft a basic will is well worth it.

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Estate Planning in a Down Market

post by Mei Ling Lin

"BASIC GIFTING TECHNIQUES
Wealth transfer is a huge issue for those who expect their heirs will have to pay estate taxes at rates up to 45%. The tax code permits $3.5 million to be exempted from estate taxes, $1 million of which may be given away before death as gifts. The estate tax is in play in Washington now. Under current rules, it disappears briefly in 2010, then returns with a lower exemption and a higher rate in 2011. But experts believe Congress will take action before the tax disappears and that the $3.5 million exemption is likely to remain.

For 2009 you can give away up to $13,000 per beneficiary without having to pay taxes. (The $1 million lifetime limit applies to gifts above that yearly gift exclusion.) When asset values are depressed, as they are now, that gift-tax exclusion is more valuable. Consider: If you have 500 shares of Stock A that traded at 100, with the gift-tax exclusion at $13,000, you would have been able to transfer only 130 shares before bumping up against the hefty tax. But if the shares have been knocked down by 40%, in line with the broader market, you can transfer 217 shares tax-free.

The same thinking applies to getting the most out of the $1 million exemption. (The downside risk: If the stock keeps falling, you've used up part of your exemption for nothing.)
This is the simplest of all estate-planning moves for a down market. "You're trying to reduce the size of your balance sheet before you die," Weigandt says. "The question is, are you comfortable reducing your current assets to save your kids something on the estate tax? That question is harder now. But it's not all or nothing: You could take steps to give away heavily discounted assets in smaller increments."

wrote by Amy Feldman

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Created by Joseph Owen 

Estate Planning: Wills - Bloomberg: Your Money

By Lee Ruth

Hitting the Jackpot

By Angelo Orlando

LATELY I'VE BEEN thinking about winning the lottery. No, I don't actually think that a scratch ticket is the key to my financial future. (At least not most of the time.) It's on my mind because a few days ago I was on TV discussing what the winners of the seven-state Big Game drawing should do with their $331 million jackpot. In case you missed this news item, last week three absurdly lucky people won the second-biggest lottery drawing ever. The odds of winning? One in 76 million. Getting killed by a bolt of lightning is apparently 17 times more likely, according to CNN.
On my way to the studio, I couldn't help but wonder: A) What would I do with that kind of money? and B) Was I about to make a complete fool out of myself on live television? Even after the segment was over, the second question was difficult to answer. But the first one was easy: I'd buy a charming brownstone near Central Park, a county house on Cape Cod and some sort of vehicle to get me back and forth.



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http://www.smartmoney.com/personal-finance/estate-planning/hitting-the-jackpot-12730/

Estate Planning Basics

Estates & Trusts : Estate Planning Basics



Posted By, Ken Smith

Top Things to Know for Estate Planning

By Lindsay Chin

This article was found on CNNmoney.

1. No matter your net worth, it's important to have a basic estate plan in place.

Such a plan ensures that your family and financial goals are met after you die.

2. An estate plan has several elements.

They include: a will; assignment of power or attorney; and a living will or healthcare proxy (medical power of attorney). For some people, a trust make also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates.

3. Taking inventory of your assets is a good place to start.

Your assets include your investments, retirement savings, insurance policies, and real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you're ever incapacitated? Whom do you want making medicial decisions for you if you become unable to make them for yourself?

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