Ted W Hoyt

Estate Planning is the process of planning one’s estate to address the situation of a possible death or disability. A variety of documents come in to play that are used strategically to address the particular needs of an individual client. Particular devices such as Revocable Inter Vivos Trust also known as Living Trusts are utilized as they have current tax advantages and probate expense, and privacy advantages.

One of the tools for the estate planner is the use of an Inter Vivos (lifetime) Life Insurance Trust. Typically such a Trust would be used in the situation where a couple would have a taxable estate and life insurance is going to be provided for to pay estate taxes. By setting a life insurance policy to be owned by a life insurance trust, properly done, these proceeds will be excluded from both income taxes and federal estate taxes.

Most tax assessments begin at the Tax Audit phase. An Audit occurs generally as a result of a computer program by the IRS targeting the taxpayer’s return as having some financial information that fits the criteria as established by the computer as being subject to a high risk of noncompliance by taxpayers.

Wills are an important component of such planning to address the issues of picking a guardian or picking an executor of the estate and defining how assets would be inherited.