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The Planning Process: Estate Planning
Estate planning is the careful consideration of a variety of usually complex legal and tax issues that affect the distribution of your estate after your death. The result may be a written plan that includes the potential valuation of your property, estate tax estimates and recommendations that may help protect the distribution of your estate. An estate plan also may recommend the establishment of trusts and a plan for charitable giving.
Estate planning lets you know how much there is to leave your heirs. You decide how your estate is to be distributed and who is to be the executor of your estate. Proper estate planning helps keep the state or others from distributing your estate.
At the heart of implementing your estate planning is the Will, a document written by an attorney that transfers the real estate and personal property you own at the time of your death to your heirs or those you designate. In addition, you can create a trust, a written document that distributes your assets to your beneficiaries and helps to avoid probate at the time of your death. It also can help to save on taxes.
You also can help reduce the size of your estate and subsequently the tax liability of your estate through gifting.
When should you consider estate planning? When you approach amassing real estate and personal property worth more than $1.5 million. A well-crafted estate plan is one way to help minimize federal taxes on large estates. Taxable estates valued at $1.5 million (increasing to $3.5 million by the year 2009) or less are free of federal estate taxation. The federal estate tax is repealed for 2010; however,in 2011, the estate tax will be restored utilizing a $1 million exemption amount, unless action is taken by Congress.
Estate planning lets you know how much there is to leave your heirs. You decide how your estate is to be distributed and who is to be the executor of your estate. Proper estate planning helps keep the state or others from distributing your estate.
At the heart of implementing your estate planning is the Will, a document written by an attorney that transfers the real estate and personal property you own at the time of your death to your heirs or those you designate. In addition, you can create a trust, a written document that distributes your assets to your beneficiaries and helps to avoid probate at the time of your death. It also can help to save on taxes.
You also can help reduce the size of your estate and subsequently the tax liability of your estate through gifting.
When should you consider estate planning? When you approach amassing real estate and personal property worth more than $1.5 million. A well-crafted estate plan is one way to help minimize federal taxes on large estates. Taxable estates valued at $1.5 million (increasing to $3.5 million by the year 2009) or less are free of federal estate taxation. The federal estate tax is repealed for 2010; however,in 2011, the estate tax will be restored utilizing a $1 million exemption amount, unless action is taken by Congress.
