Post By: Dana Sunderlin
A young couple is just starting out in life with two young children and wills they've created from forms from an Internet website they heard about on the radio. They've arranged to leave everything to each other, and then to their children. While their children are still minors, both parents are tragically killed in an automobile accident. The wills are presented in probate court, and the proceeds are divided into two trusts, both supervised by the court and subject to annual accountings and appearances. The small estate is quickly depleted by maintenance fees and overly conservative investments, and while still in their early teens, the children run out of money. A simple will is an inadequate replacement for estate planning, especially when children are involved.
Another young couple creates a well-conceived estate plan even before their first child is born. As the years go by and their financial planning does well, they stop reviewing it annually. The plan has done so well because of their continuing saving and sound investments that the estate is now subject to estate tax. When both die after living rich and full lives, the federal government takes 30% of everything they've built and saved. Estate taxes can reach as high as 55% and continue to change at the whims of Congress. If you fail to review your estate plan periodically, it may fail to provide the protection you desired for your loved ones.
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