Estate Planning - So You Can Decide Who Will Inherit Your Assets
Apr 28, 2008 Debt Relief
Estate planning is the process of deciding how to effectively transfer your assets, at death, and during your lifetime. Without proper Estate Planning you could unnecessarily lose a sizable portion of your estate to taxes. While avoiding taxes is an obvious reason for Estate Planning, a more important reason may be in its ability to allow you to direct the transfer of your assets after death.
If you have an old Will, it may be time for an upgrade.
Once executed, your will should be updated regularly, especially under these circumstances: A birth, marriage or divorce in the family; a move to another state; a change in tax laws; a change in the status of dependent children; impending retirement; or a change in personal circumstances or needs.
An out-of-date will can be more trouble than having no will at all. Consider a situation involving a man who executed a will in 2001, giving $10,000 to a woman he named as a "friend." A year later, the man and woman get married. The man dies in 2004. Unfortunately, the man never updated his will. At her husband’s death, the woman claimed her elective share as a wife (one-third of the total estate) rather than abiding by the terms of the will. The man’s children from his first marriage objected. The court could decide that the surviving spouse is limed to $10,000.00 from the estate.
The following is 10 life changes that have the potential to affect your estate and would indicate the need for a revised Will:
Nigella Sparks Debate Over Charitable Legacies
Apr 28, 2008 Debt Relief
Domestic goddess Nigella Lawson recently hit the headlines with her declaration that she intends to leave her entire fortune to various charities rather than bequeath any of it to her children. Her 64-year old partner, Charles Saatchi, takes the polar opposite view and believes that his and Nigella’s combined three offspring from previous marriages should inherit the lot, currently estimated at £110million.
Whatever resolution the two finally agree to their disagreement, it has brought into focus the fact that charities benefit greatly from the proceeds of many people’s estates. Whether or not you agree with Ms. Lawson’s philosophy of letting the kids ‘do it for themselves’, leaving a legacy to charity is definitely a very noble action.
One of the most notable charitable legacies in the UK is the Wellcome Foundation, formed using the fortune of Sir Henry Wellcome after his death in 1936. However, many modern billionaires are not waiting until they die, but instead have decided to distribute their fortunes to charities whilst still alive, prompted by the decision of Bill Gates. The Microsoft chairman has set up a $7billion foundation which aims to close the considerable health and education gaps between Western and third world countries.
But, whilst billionaires can set up their own charitable foundations there are scores of existing worthwhile charities that constantly need funding. Charities derive a significant amount of their income from bequests and it’s not just multi-millionaires or billionaires that provide charitable legacies; many ordinary folk like to leave a portion of their accumulated wealth to charity following their death. Indeed, many smaller contributions soon add up and it is those donations that can often mean the difference between charities carrying on their good work or being forced to give up.
You Have A Living Trust, Who Acts As Trustee? Six Reasons To Consider A Corporate Trustee
Apr 28, 2008 Debt Relief
Over the years in my work planning for affluent clients, I have often recommended the use of a corporate trustee. It is not common that a client’s initial decision regarding the trustee often is the eldest or most responsible or successful child or grandchild. There is often a notion in the client’s choice that there is some honor or distinction associated with naming a loved one as trustee, but upon a further understanding of the complexity of the issues and the work involved with acting as a proper trustee, the client recognizes the value and strategic logic of choosing a corporate trustee.
Some may ask, what is the typical threshold when a corporate trustee is right for a client? This obviously must be handled on a case by case basis, but as a general rule of thumb when a client’s net worth is above $1,000,000 (a common minimum asset requirement for corporate trustees), the benefits and cost of utilizing a corporate trustee far outweigh any potential negatives and the burdens placed on a loved-one forced to sit in the trustee position based on an improperly held notion or idea.
In every conversation with our clients we present the following six reasons why a corporate trustee should be considered when the total value of assets exceeds $1,000,000. The client is often shocked to see how quickly their assets can total a million dollars because in an estate planning sense you must include the value of your home, life insurance polices, IRA’s, and investments. Additionally, many financial professionals are aware that advanced planning strategies become necessary as assets approach the 2008 annual estate tax exclusion limits of $2,000,000.
Six Reasons to Consider the Use of a Corporate Trustee.
1. Complex Trust Law and Frequent Trust Litigation.
