by
Carl Hampton
09/27/2006
Benjamin Franklin said on more than one
occasion, “In this world nothing can be
said to be certain, except death and
taxes.” Knowing this, why do so many
Americans fail to keep an up-to-date Estate
Plan. You would think the last thing we
would want to do is pass away without
ensuring the well being of our loved ones.
Most of us would agree that death is not the
easiest subject to talk about, but we really
should be prepared for all that legal stuff
that follows our death.
1. Revise: Update Estate Plan
If your current estate plan is older than
five years, revise it by amending the plan
instead of starting a new document. You
would probably want to have a lot of say in
your estate plan, but do not create an
estate plan by yourself, even if you believe
that your estate plan is not going to be
difficult. You should always talk to an
attorney that specializes in estate
planning. For a local listing of estate
attorneys, visit www.lawyers.com. Click on
“Estate Planning” under the “Trust and
Estates” option.
Make sure you find a reliable power of
attorney for health care and property
matters. Recent cases like Terri Schiavo
demonstrate the worse case scenario of not
explaining healthcare requests clearly. As
for property, update the Estate Plan
frequently. Carefully outline your trust
documents. Retitle your financial accounts
and fund your trusts so that they are as
specific as possible. You are the primary
trustee until you can no longer manage that
role. If you have an Irrevocable Life
Insurance Trust (ILIT), make sure the policy
pays out the trustee of your ILIT. If you do
not have a will or a living trust, you
assets will belong to the state.
2. Decide: Trustee, Executor, or Guardian
Not knowing who to choose or trust to act on
your behalf should not be holding you back
from creating your Estate Plan. You can
always appoint an attorney and change it
later. It may help to remember that you can
change the person listed in your Estate Plan
at any time if you later find someone that
is better for the job.
3. Credit Equivalent
There are two types: Exemption Equivalent
Credit and Credit Equivalent Trust.
Exemption Equivalent means that you can give
up to $2 million dollars without being taxed
– be it your loved one or your favorite
organization. However, if you want your
spouse to make the most of the money, you
should consider the Credit Equivalent Trust
(also know as a “B Trust”). Both you and
your spouse can set up this trust, which can
then be valued up to $4 million dollars
total and not be taxed.
Last but not least, make sure you talk to
your family before and/or after you write
your will. Many a good tale has been told by
Hollywood over the tensions that arise when
a will is read. Most of the problems can be
averted when explanations are given as to
why you have written the will that way.
Have an opinion or a question you would like
me to answer, then write me!
http://www.CarlHampton.com
