|
|
|
|
A simple will, just isn't enough! Estate Taxes is the only voluntary tax in the Internal Revenue Code. You can avoid estate taxes with an irrevocable trust. PLANNING FOR YOUR ESTATE If you don't "own" any assets in your name, you don't qualify for the Probate Process and you don't qualify to pay Estate Taxes. What’s an Estate?
Estate taxes. Many people prefer not to think about what will happen on their death, but none of us are immortal and failure to make proper plans can mean that we leave behind is a mess which has to be sorted out by our nearest and dearest, at great expense and inconvenience, at a time when they are emotionally bankrupt. Take inventory of what you own: Cash, Savings and checking accounts, CDs, Stocks, Mutual Funds, Bonds, Treasuries, Exempts, Jewelry, Cars, Stamps, Boats, Paintings, and other collectibles, Real Estate ... main home, vacation spot, investment realty, your Business, Interests in other businesses, Limited Partnerships, Partnerships, Mortgages and notes receivable you hold, Retirement plan benefits, IRAs, Amounts that you expect to inherit from others. Your federal death (estate) tax, up to 55%, is based on the "fair cash value" of your property on the date of your death, not what you originally paid. State probate and death taxes are based on the "location" of your property. Thus, if you own property in different states, each state has to be robated and each will want their fair share. The only real alternative to a will arrangement is to set up a trust structure during lifetime which, with careful planning, can operate to eradicate these delays, administration costs and taxes as well as giving a large number of additional benefits. For these reasons the use of trusts is increasing dramatically. The problem is: Such practices can be shortsighted, cost money, and raise unnecessary and unexpected problems, long time delays, and high administration costs. For one thing, most people have a larger estate than they may realize. For another, joint ownership will not necessarily beat probate hungry lawyers or the estate tax man and will often mean that considerable sums become payable in inheritance tax or estate duty. A will is not a substitute for a trust. A will does not avoid probate. Many individuals seek to put order to their affairs by making a comprehensive will. Under this arrangement the Executors named in the will would apply for a grant of probate, take possession of the assets of the deceased and then distribute those assets according to the terms of the will. What’s "Probate" ? Probate is a public procedure. All interested and non-interested parties can become extremely well informed about your private wealth / now a matter of public record. A will is not substitute for a TRUST. WHO stands to gain by this complexity? In some states the death of a husband leaves the widow with only 1/2 of his estate, with the other half going to his relatives, unless the couple has children. With one child, the widow splits the total. With more, the widow gets 1/3 and the children divide up the rest. State rules vary, consult with a competent professional. Of course, if the wife dies first, the husband, kids, and others share her estate. If a car accident kills an entire family, but the wife lingers a while, her relatives get the couple's property. Husband's kin, if he died last. You can avoid these unwanted results if all your valuable assets were owned by your ULTRA TRUST® or THE MEDALLION TRUST® Young children who inherit without a will may require guardians appointed by courts, perhaps even court OK to spend their money on them. Owning property in your name or Jointly with your spouse isn't a substitute for a will. Sure, it transfers ownership at death, but it can create a number of unnecessary complications. Simultaneous deaths of husband & wife joint owners without wills can cause their estate to be inherited by persons they would not want to get it. Estate taxes may also be higher; may result in two levies instead of one. Control of assets can be tied up. One of the owners may disagree about sale or may be incapacitated or too young to sign binding contract. Survivor may be left with lots of assets and have little expertise for managing them, particularly such things as an interest in a business, securities or real estate. Leaving them in trust with a bank or attorney or friend as trustee of your ULTRA TRUST® or THE MEDALLION TRUST®, may be better to assure that your survivors are cared for. Joint ownership also can complicate a divorce. Husband and wife who own everything jointly can get into a needless hassle if they split. Items included in your taxable estate: For example, many people believe the higher exemption amounts that can pass tax free eliminate any need for estate planning. This type of thinking is fundamentally flawed, for example:
Finally, estate tax laws can change. Thirteen times in 25 years, overhauls, tightenings for some, headaches for all. Congress is always tinkering with the idea that they know better than you, where your money should go. You can avoid these unwanted results by implementing Your ULTRA TRUST® or Your MEDALLION TRUST® Planning your estate is not an easy task. It takes time and effort. The place to begin is with yourself, your own goals and consideration of your heirs, their ages, abilities, needs and so on at a time when there's no pressure to implement. The New 2001 Tax Act:
|
| ||||
