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What Does a Good Estate Plan Look Like?

May 1, 2010

The primary goal of all estate planning is to pass your property to your loved ones at the lowest possible cost.  Many different costs, taxes, and fees can erode value from your assets as they are passed to your children.  For example, if you pass away after January 1, 2011, federal estate tax can take a huge bite from your estate if your assets are valued greater than $1 million on the date of your death.  Estate tax is a very large tax.  Families who do not effectively plan their estate to address federal estate tax can be forced to sell land or other significant assets in order to pay federal estate tax, which can be as high as 55%.

In addition, costs and fees associated with the probate process can reduce the value of the property ultimately received by your children.  Any assets that you own at the date of your death need to be transferred to your loved ones as directed by your last will and testament.  But, in order for those transfers to occur, your will must be probated through the court, and the power of the court enables your personal representative to re-title your assets from your name to your loved ones.  This probate process conducted through the court costs money.  Typically, an attorney is paid to file the proper pleadings and represent the personal representative in court.  Costs and fees are often assessed as a percentage of the size of the estate.

Probate fees and unnecessary estate tax can be eliminated by a proper estate plan.  The most effective tool to minimize these costs is a revocable living trust.  A revocable living trust can maximize the exemptions and deductions allowed by the federal government which eliminates any unnecessary taxes.  In addition, a trust plan can avoid the costs and hassles associated with probate court.  As a result, more of your hard earned assets will pass to your children and loved ones, thus accomplishing the primary goal of estate planning.

However, a good estate plan should accomplish many other goals, such as protecting your property in the hands of your surviving spouse after you are gone.  Your plan should ensure that your property will be passed to your children even though your spouse remarries after you are gone.  The estate plan you design today can protect property in the hands of your children.  Strategies can be employed to shield property from predatory creditors, or to ensure that property will not be lost if your child is divorced.

A good estate plan needs to be designed by an estate planning specialist in order to pass your property to your loved ones and the lowest possible cost, and to protect your property in the hands of your family after you are gone.  Talk to an estate planning specialist.  Your children can be given the tools to grow your assets and benefit your family for generations.


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