The objective of this discussion is to review some of the myths and realities of estate planning. A number of articles have been written on the subject but let's see if we can't put a different spin on it by keeping it simple. By dispelling some of the common misconceptions, we will have a better understanding of how important it is to take positive action to keep our estate plans in order.
The Economic Growth and Tax Reconciliation Relief Act of 2001 (EGTRRA) threw many individuals for a loop when it came to estate plannings. Tax laws are never simple but EGTRRA added a level of confusion rarely seen in advanced planning. For instance, between now and 2011 the federal estate tax is scheduled to decrease, disappear and then spring back to life. According to a Wall Street Journal article dated May 11, 2005, the "...current estate tax law puts estate-tax planners in an impossible situation...". With such uncertainty, some potentially damaging estate planning myths have surfaced. These financial "urban legends" stand in the way of prudent estate planning. We will address some of the most prevalent and most common estate planning myths so we can be better informed. Myth. The Federal Estate Tax was repealed.
Your beneficiaries are those individuals who will inherit your estate when you die. It is important that you carefully consider and name your beneficiaries. Choose the appropriate individuals for the estate you will be leaving behind. Many times, beneficiaries are children and spouses. However, if you have young children, you may not feel comfortable setting up your estate so that they inherit a large sum of money directly. How will they spend it? Are you sure that they would make wise choices? If you would like to have more control over the estate after you die, then it is important that you set up a Trust for your beneficiaries. By establishing a Trust, you can allocate a certain portion of your estate towards a child's education, first home, or other purpose of your choosing. Consult with a qualified attorney for more information about how to set up your estate for your beneficiaries.
Central to estate planning is choosing people to make decisions for you both during incapacity and after your death. These people include trustees, guardians, agents, and beneficiaries. Make sure that you select an agent who knows you and your wishes well. He or she will speak for you when you cannot, so it is vitally important that he or she knows you well. Make sure you and the agent have a clear understanding of his or her role in your estate and that you have clearly communicated your desires.
During the summer of 2005, there was much talk in Washington, D.C. of estate tax repeal. At one point, the House of Representatives voted in favor of repeal and the issue was put before the Senate for consideration. 58 Senators (out of a necessary 60) voiced their support for repeal in an informal straw poll. There was a general feeling in Washington, D.C. that the issue of repeal would come to a vote in the Senate. Because of the factors previously listed (Hurricane Katrina, Iraq war, deficit concerns, etc), the issue never did make it to a final vote in the Senate. As of late 2007, the sentiment in the House and Senate had shifted considerably against repeal. Most experts feel that repeal efforts have very little chance of success over the next two years. This, however, is not the end of the story.
While such a scenario may be rare, estate planning tax advice is not under the oversight of any specific government authority. So the quality of advice you get will depend to a great degree on the experience of you advisor, be it an attorney, accountant, banker, or financial planner. By using an estate planning guide to familiarize yourself with your options so that you know what questions to ask, you will have a much better chance of finding a trustworthy professional to provide your estate planning tax advice.
The Economic Growth and Tax Reconciliation Relief Act of 2001 (EGTRRA) threw many individuals for a loop when it came to estate plannings. Tax laws are never simple but EGTRRA added a level of confusion rarely seen in advanced planning. For instance, between now and 2011 the federal estate tax is scheduled to decrease, disappear and then spring back to life. According to a Wall Street Journal article dated May 11, 2005, the "...current estate tax law puts estate-tax planners in an impossible situation...". With such uncertainty, some potentially damaging estate planning myths have surfaced. These financial "urban legends" stand in the way of prudent estate planning. We will address some of the most prevalent and most common estate planning myths so we can be better informed. Myth. The Federal Estate Tax was repealed.
Your beneficiaries are those individuals who will inherit your estate when you die. It is important that you carefully consider and name your beneficiaries. Choose the appropriate individuals for the estate you will be leaving behind. Many times, beneficiaries are children and spouses. However, if you have young children, you may not feel comfortable setting up your estate so that they inherit a large sum of money directly. How will they spend it? Are you sure that they would make wise choices? If you would like to have more control over the estate after you die, then it is important that you set up a Trust for your beneficiaries. By establishing a Trust, you can allocate a certain portion of your estate towards a child's education, first home, or other purpose of your choosing. Consult with a qualified attorney for more information about how to set up your estate for your beneficiaries.
Central to estate planning is choosing people to make decisions for you both during incapacity and after your death. These people include trustees, guardians, agents, and beneficiaries. Make sure that you select an agent who knows you and your wishes well. He or she will speak for you when you cannot, so it is vitally important that he or she knows you well. Make sure you and the agent have a clear understanding of his or her role in your estate and that you have clearly communicated your desires.
During the summer of 2005, there was much talk in Washington, D.C. of estate tax repeal. At one point, the House of Representatives voted in favor of repeal and the issue was put before the Senate for consideration. 58 Senators (out of a necessary 60) voiced their support for repeal in an informal straw poll. There was a general feeling in Washington, D.C. that the issue of repeal would come to a vote in the Senate. Because of the factors previously listed (Hurricane Katrina, Iraq war, deficit concerns, etc), the issue never did make it to a final vote in the Senate. As of late 2007, the sentiment in the House and Senate had shifted considerably against repeal. Most experts feel that repeal efforts have very little chance of success over the next two years. This, however, is not the end of the story.
While such a scenario may be rare, estate planning tax advice is not under the oversight of any specific government authority. So the quality of advice you get will depend to a great degree on the experience of you advisor, be it an attorney, accountant, banker, or financial planner. By using an estate planning guide to familiarize yourself with your options so that you know what questions to ask, you will have a much better chance of finding a trustworthy professional to provide your estate planning tax advice.
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Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Gains Of Quickbooks Training NYC You have full permission to reprint this article provided this box is kept unchanged.
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