Friday, December 11, 2009
By: Nicole Nelson
The number one mistake of estate planning is the mistake of “never getting around to it”. If an estate is not made, including designation of a trustee, a will and a living will the people who are closest to you may be left with your debt or have to make tough decisions because you “never got around” to drafting documents that explain what you would like to happen to you and your assets. By creating an estate you are letting your beneficiaries know what you would like to be done in some touchy situations. This also may prevent arguments between beneficiaries because your wishes were clearly laid out.
Another mistake that is commonly made is the myth that estate planning is only important for the wealthy. Regardless of the size of your net worth, everyone owns assets that are worth something. Also, some people end up surprised how large their estates actually are after taking into account things like the value of their home. If you are concerned what so ever with where your assets will end up upon your demise, an estate needs to be seriously considered.
Although a will is made, does not mean the job is done. This is another mistake that has caused people legal trouble in the past. Things such as birth or adoption of children, divorce, death and other factors may change how your will is divided to your beneficiaries. Other things such as the sale or purchase of large and valuable assets or just simply changes in tax legislation may make your will not as legally tangible as you thought. This is where review and updates of your will are important.
By Ahmed Al-Salem
This is kind of strange. A man dies yet he continues to make money. So much so, that he can make more money dead than he can alive. We see this a lot in history. Death comes before fame sometimes. And those who fall victim to this strange phenomenon are usually artists. Shakespeare, Van Gogh, Tupac, MJ...and the list goes on. Who gets all this money? Since the person is dead whos bank account do the sales go to. In most cases, the money goes to the people who go after it the most. The government gets the first cut, then agents, then producers, etc and what ever is left get split among those who received money from wills.
By Shawn Chandok
1. No matter how wealthy you are, it is crucial to have an estate plan.
2. An estate plan isn’t only a will, but has several other elements as well. Examples include, the power of an attorney who will execute your will, trusts that help you avoid taxes to your heirs and a health care proxy who will have medical power in case you are unable to do so for yourself
3. Including ALL of your assets: Make sure you include all your assets in your estate plan such as investments (mutual funds, stocks), real estate (in state & out of state), and insurance policies (life insurance beneficiaries).
4. The Will: Everyone needs a will. A will designates your beneficiary and/or guardians. Furthermore, a will avoids you from dying intestate or without a will whereby your assets can be drained by the government or almost anyone who puts a claim on them and battles in court.
5. Trusts aren’t only for the rich: Trusts enable EVERYONE to give gifts to relatives’ tax free while providing privacy and sometimes protection from courts.
6. Don’t leave all your wealth with your spouse: Although you can leave all your of wealth to your spouse tax free, this isn’t necessarily a good idea because when your spouse dies, your children will have to pay more in taxes if he/she leaves it to them.
7. Charity: Making charitable donations reduces your current taxable income by the present value of your future donation.
Estate planning also comes with many tax burdens that you must plan for. These include many such as inheritance taxes and estate taxes. If you plan your finances the right way you can avoid many taxes which will give you more money to leave for your family. Estate planning can sometimes be very costly as they have to be approved by lawyers and everything, so Wisconsin has actually decided to help out.
Milwaukee, WI has started a new program called “Wills for Heroes” in which they are offering free estate planning for police officers, firemen, and other emergency personnel. “Services include help in creating wills and living wills, as well as providing power of attorney for financial and health care matters.” It is a good way to give back to the people that risk their lives every day to help others.
Thursday, December 10, 2009
Posted by Chris O'Sullivan
Whatever Congress ends up doing with the estate tax, farmers and ranchers can shield themselves from its impacts by planning ahead, an expert advises.
By using a trust mechanism that's available to everyone, a farming couple could protect a larger portion of the family's estate from taxes, said Terry Francl, senior economist for the American Farm Bureau Federation.
Farm owners can also gift a certain amount of property to their heirs each year, which over time reduces the amount of assets that can be taxed at the owners' deaths, he said.
"There are many types of legal remedies," Francl said. "For example, you can give stock to charities and so on. You get a charitable deduction and don't have to pay capital gains on them ... There's a lot of alternatives."
The options remain as Congress has entertained numerous proposals for estate tax reform this year, the latest of which is a bill by Rep. Earl Pomeroy, D-N.D., that would freeze the estate tax at 2009 levels.
Currently, the estate tax is set at 45 percent for estates worth more than $3.5 million or $7 million for a couple. If Congress does nothing, estate tax rates will revert in 2011 to pre-2001 levels, with estates worth more than $1 million taxed at 55 percent.Click here to read more....
Although many people have been putting off making an estate plan because of rumors of the elimination of the federal estate tax, president Obama has stated that the tax isn’t going anywhere. People shouldn’t be worrying about estate tax though since only the wealthiest two percent pay this tax, they should be worrying about if their estate protects what needs to be protected. There are certain things to make sure you include when planning your estate. If you have children that are minors, you need to name a guardian and a trustee (who should not be the same person) in case both you and your spouse die. Also, some states require that a half to a third of your estate goes to your spouse even if you specify in your will a smaller share. It is also important to know that an estate has a couple parts. These parts are your will, an assignment of power of attorney and a living will or health care proxy. It also may be a good idea to make a trust. Trusts aren’t just for the wealthy these days. They can allow you to reduce your estate tax as well as gift tax (if they apply). They also may be able to offer you greater protecting of your assets from creditors you may have and against potential lawsuits. Overall it is never too early to plan your estate. It is also always a better idea to have one then not. Having an estate will make it much easier for your loved ones after you die.
By: Robert Katz
Many people wait much too late until they decide to start Estate Planning; when it is much better to just understand the fact the you are mortal and you will die some day, and that you should make sure your possessions, family and loved ones that your leaving behind are well taken care of. Estate planning consists of writing your will, deciding the distribution of all of your cash, who gets your real estate, dividing up your possessions and other property, and leaving a instructions and a last message to you family and friends with advice on dealing with your loss. There are many potential pitfalls when you plan out your estate insufficiently. Some of the serious financial problems with not planning out your estate properly or at all are the excessive delays of probate and the cost of lawyer, accountants, administrative fees, etc. After you dye, for example, if you have most of your money in investments and your investments start to decline with an economic recession, like the one we are in now, your family will not have the ability to withdraw these investments in time if you didn't set up the proper precautions. Additionally, while it maybe hard for you do deal with the fact that you are going to die some day, isn't it more important to help your family and loved ones cope with your loss by making these decisions and provisions for them so there isn't added stress and responsibility to deal with. Finally, isn't it also important to make sure you are the one whose in charge of whom is entitled to everything you've earned over the course of your life, and also how you will be remember based on the legacy create for yourself.
Sunday, December 6, 2009
For many, planning for their deaths seems almost wrong. Nobody plans to die right? Well despite what many may think, planning for what happens after you die is a must. This is where estate planning comes in. According to about.com, “in simple terms estate planning involves both planning for the possibility of mental incapacity and planning for certain death.” Estate planning will determine how your accumulated wealth will be divided up amongst your heirs.
There are several various parts to an estate plan. The first and foremost part of your estate plan should be your will. According to CNN Money a will is imperative. A will is “a device that lets you tell the world whom you want to get your assets. Die without one, and the state decides who gets what, without regard to your wishes or your heirs' needs.” Furthermore, an estate plan usually contains a living will, letter of last instruction and a power of attorney. Each and every one of these parts ensure that after you die your wishes and intentions are carried out the way you wanted them to.
By creating an estate plan instead of dying intestate (without a will), your accumulated wealth will be passed on to whom you desire. Also, if you have any children, the estate plan will include a named guardian for your dependent. As scary as it is, planning for your estate after you pass away pays.
Saturday, December 5, 2009
By Leah Gorham
We often hear news stories about celebrities and wealthy people making mistakes when planning their estates, leading to hardships for their loved ones after they die or sometimes messy fights among heirs. For instance, when heath Ledger died at age 28, he had a will; however, it had not been updated in three years, which was prior to his relationship with Michelle Williams and the birth of their daughter, Matilda Rose. His will left everything to his parents and sister. Thankfully, when concerns were raised to whether or not Ledger's father would properly care for Matilda Rose, he assured the family that he would.
Although many people think that they do not need to worry about estate planning if they are not famous or wealthy, that is not the case. Mistakes such as Ledger's can have a negative impact on anyone. Believing the myth that estate planning is only for the wealthy is one of the top mistakes made in estate planning. Others include, not reviewing or updating your will, not using tax-planning strategies, and not planning for your children. Proper planning can help those to whom you are leaving assets avoid paying high federal income taxes and estate taxes and help avoid confusion.
In order to avoid mistakes in estate planning, there are some important things that everyone should know. First, no matter what your net worth is, it is important to have an estate plan to ensure that your family and financial goals are met after you die. Second, everyone needs a will. Dying without a will - also known as dying "intestate" - can be costly to your heirs and leaves you no say over who gets your assets. Also, discussing your estate plans with your heirs may prevent disputes or confusion. These are just the extreme basics in estate planning, and in order to learn more about how to make sure your assets are distributed as you wish after your death and that your family is taken care of, you can visit the links below.
Source 1, Source 2, Source 3