Estate Planning Dialogue

Friday, October 2nd, 2009

At times, discussions with family members and parents regarding estate planning may be stressful, emotional, and difficult.  However, the discomfort cannot compare to the pain felt in dying without implementing estate planning strategies.  When you rely on state governments to distribute your assets for you, your heirs may experience time delays and probate costs that may render them financially unstable.

So to ensure a life-changing and effective discussion, you must suggest a dialogue with your siblings or other concerned family members.  Arrange a convenient location and time, choose a comfortable setting, and of course, limit distractions.  It would also help to encourage an honest and open airing of goals and issues to stress that the discussion is very important.  Most definitely, everybody must implement an effective plan to serve the needs and wishes of all.

This is a very challenging task especially for the elderly parents who are initiating the discussion.  But this is needed to provide more control to the estate owner.  All issues must be discussed and understood by every family member.  They should also know the availability of legal documents including wills and trusts and use them as tools to have a successful discussion and ultimate peace of mind for everyone.

Tags: dialogue, discussion, elderly, Estate Planning, goals, owner, plan, probate, strategies, tools, trusts, Wills
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Education Savings Plan in Estate Planning

Sunday, September 20th, 2009

Estate laws truly affect your assets.  Most of your assets constitute your estate when you pass away.  And since you know that an estate over $3.5 million will be taxed up to 45%, you may want to keep your estate below that level.  In order to do that, you can give gifts or acquire a 529 education savings plan.

Actually, this kind of education savings plan would allow you to select any relative or friend as your beneficiary.  That person is expected to incur education costs.  Moreover, the plan offers flexibility like for example; you can change the beneficiary any time, change investment elections, and make various contributions to the account.

You can choose from several 529 accounts that may be available in your state.  If you’re a resident of Ohio for instance, you can choose Ohio 529 plan and deduct your contributions from the state income tax.  Currently, IRS rules are allowing investors to make large lump sum contributions to the 529 plan.  In 2009 you can contribute up to $65,000 for individuals or $130,000 for couples.

So 529 education savings plan not only allows you to help your children grandchildren, nephews, nieces, and other loved ones from pursuing education, it would also allow you to qualify for tax deductions.  Seek advice from your estate planning attorney whether this strategy could be applied in your situation.

Tags: assets, attorney, education, estate, Estate Planning, laws, Ohio, plan, savings, strategy, tax deduction
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Deal with Estate Taxes: Plan Ahead

Thursday, July 23rd, 2009

The golden rule in estate planning is: “Do it before you need it.”  Prudence actually suggests that we plan ahead because only a few people know when death can fall upon us.

In Oregon, there may be some last-minute opportunities for the residents despite its imposition of death tax on top of federal estate tax.  When federal estate tax exemption has been scheduled to dramatically increase, many states including Oregan became nervous since the federal exemption 10 years ago was $600,000 with 55% top marginal tax rate on the excess.  Simply put, the feds collect a large tax from a decedent’s estate - this includes taxable gifts that are made by decedents, and then, throws a portion back in state credit form.

Most states simply accept this “throwback” by imposing tax on its residents - this is the exact amount of credit permitted by feds.  However, when the feds have lowered the rates and increased exemption (currently $3.5 million and 45% flat tax rate), the state credit was also phased out.  Oregon reacted by simply enacting its death tax.  In other words, if the gross estate of the decedent exceeds $1 million (fixed Oregon exemption today), the excess will be taxed by the state.

Tags: decedent, Estate Planning, estate tax, feds, Oregon, plan, tax
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Checklist for Parents’ Will

Monday, July 6th, 2009

As parents, you should be prepared to plan for the unthinkable.  If one or both parents die, anyone could be assigned as guardians to your children.  This means that the courts - not you - would decide their future.  So to guide you through the drafting of your will, consider the following steps:

-Pick a guardian for your children as well as their future assets.  Think about this thoroughly.  Who could be there for them who’ll share your values in the long-term?  What’s surprising is that the person may not be your close blood relative or current romantic interest.

-You can choose one person to raise your child and another one to take care of your money.

-Before making the designation, make sure that your guardian will accept this responsibility.  Divorced parents should make this guardianship decision together.  They could also consider each other to be named as guardian, as the courts would most likely award it to either of them when the other party petitions for it.

-Give a certified “will” copy to your guardian and let them know where you stored the original.

-Pick an attorney who’s board-certified in estates and wills.  It would also be best if they had an advanced training or certification to claim their specialized area.

Tags: assets, attorney, courts, estate, estates, guardian, parents, plan, will, Wills
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