Get Estate Planning Advice!

Estate planning is certainly not the most popular subject to discuss at the dinner table, or in any other venue, for that matter. But if you’re at all serious about planning for your financial future, and being in charge of what becomes of you assets, the time must come when you’ll have to address the issue. And like most things of importance, there’s no better time than the present. You’ll probably be quite surprised at how much easier you feel once you’ve formulated your plans, knowing that your loved ones will be taken care of in the way that you’ve envisioned.

That being said, here are some questions to ponder with your attorney concerning the planning of your estate:

  • When should estate planning begin? You should have a will as soon as you have a family, a spouse and/or children. If it’s just you, it depends upon how much your assets are and if you’re satisfied with the way that the laws of your particular state would dictate their dispersal if you suddenly weren’t around. Typically, if you die without a will, your estate would go to your next of kin (after probate, of course).
  • Is your attorney the right person to handle the estate? If your attorney is a general practitioner, he or she should be able to do the job, assuming that your estate is not too large and you don’t have many out-of-the-ordinary requests. If your estate can be valued at over two million dollars, which means that you’ll be dealing with estate tax issues, or if you would rather not leave it to the usual heirs, then you’ll probably want to opt for an estate planning attorney who has experience in writing trusts. Their rates may be somewhat higher, but their experience in these matters could well be worth it.
  • How much does estate planning cost? Just as the cost of everything else varies from state-to-state and from region-to-region, so do attorney’s fees. A basic package for a nontaxable estate (one that’s less than two million dollars) would probably cost you $1,000 or less. This might include a will, a durable power-of-attorney, living will and health care proxy. Planning for a reasonably simple but taxable (over two million) estate would, of course, run you more.
  • Is my estate taxable? Well, regardless, you won’t have to pay, but your heirs may have to pay out of the value of the estate. The federal government gives what’s called a unified credit, which allows you to pass along a certain amount of assets tax-free. That amount is currently set at, you guessed it, two million dollars. Anything over that amount becomes subject to taxation according to a sliding scale with the maximum tax rate being 46% (according to the IRS, the top rate will drop to 45% for 2007). To determine the value of your estate, simply total your assets (which includes property, business interests, investments, retirement plans and life insurance polices that will benefit your spouse) and subtract your debts.
  • Are there any ways to reduce or eliminate the tax bill on my estate? If your estate is valued at over two million dollars, there are things that you can do to lower the amount that will be taken in taxes, but you’ll need the help of an estate planning attorney to implement them. You might consider giving gifts (you can give away up to $12,000 a year to as many people as you wish); you can also put money into trusts.

Be sure to get more information concerning estate and gift taxes from the IRS.

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