“Everybody talks about the weather, but nobody does anything about it.” Mark Twain. Similarly, people talk about estate planning, but 55% of Americans do not even have a simple will.
1
It’s Not Just about Taxes
In 2008, each person can leave up to $2 million without paying any federal estate tax. This is a moving target and changes each year until 2011, when it settles at $1 million. Of course, Congress may change that amount. It’s estimated that only ½ of 1% of Americans dying this year will owe any federal estate tax.
2
Don’t Let The State Tell You How to Plan
If you die without an estate plan, the state of your residence at your death gets to decide to whom your assets go and how. This is called “intestacy.” If you leave an estate plan, you get to determine to whom your assets will go, not the state.
3
Don’t Forget The Kids
In most states you can nominate a person to be the guardian for your minor children. But, that nomination is done in your estate plan, specifically your will.
4
Protect Your Heirs from Creditors
If you leave assets outright to your children, their creditors can attach the assets just the same as if they had earned it. If you leave the assets in trust, you can protect your children from the dangers of life, like divorces, creditors, the IRS and other taxing authorities, as well as other pitfalls.
5
Protect Your Heirs from Themselves
Depending upon your wishes, you can even put the assets in a trust to protect them from the beneficiary himself or herself. Perhaps your son is really bad with money. A trust appointing someone else to make decisions can allow the money to be used for him. This way, you can protect your son from his own decision-making.
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