Plan Your Estate

Description

Turn to Plan Your Estate for straightforward, plain-English explanations of each of your estate-planning options, so you can make the best decisions for you and those you love. Attorney Denis Clifford shows you how to: avoid probate leave property through a will or trust use life insurance to provide for your loved ones name a guardian for your minor children leave property to a young person plan for incapacity implement strategies specific to business owners reduce estate taxes make final arrangements This book is for seniors doing end-of-life planning, parents planning for their young children’s futures, adult children helping their parents make end-of life plans, as well as readers of any age who want to learn about estate planning. No matter what category you fit into, if you’re like most people, you understand that estate planning is a good idea. You know that estate planning ensures that your property will pass to the right people with minimal delay, red tape, and cost. And if you do have young children, you likely know that you need an estate plan to have a say in who will care for your children if you’re not around to do it. Perhaps you even know that you can use your estate plan to leave specific instructions about your finances and medical care in case you become incapacitated and unable to make those decisions for yourself. Although you may know all of that, it’s all too easy to put off actually sitting down and making your plan. We understand. Estate planning is not easy—first, because it forces you to think about your mortality, and second, because of the legal complications and legal fees that often come with it. Plan Your Estate is here to help. This book explains estate planning in plain English, step by step, option by option. Once you know your choices, you can confidently move toward making an estate plan that fits your circumstances and wishes. Plan Your Estate covers these estate planning goals: Leaving property. If you are not wealthy, you might use a simple will or living trust, or both. You can also use co-ownership, transfer-on-death accounts, or beneficiary designations. If you have a large estate, you might also leave property to beneficiaries in more complicated ongoing trusts. No matter how you leave your property, it is better to have a plan—if you die without one, state law will decide who gets what. Providing for young children. If you have young children, you’ll want to ensure that they will be well cared for if you die before they become adults. In your will, you can name guardians to raise them and managers to look after their inheritance. You’ll also likely want to buy life insurance to make sure that your kids have money after you’re gone. Planning for incapacity. Part of estate planning is preparing for what would happen if you ever became unable to make medical and financial decisions for yourself. You can use a health care directive to name someone who will make medical decisions on your behalf and to express your wishes about end-of-life care. You can also prepare a durable power of attorney that gives a trusted person control of your finances. Preparing these documents can save your family much heartache. Avoiding probate. Probate is a court-run process for wrapping up an estate. It’s often expensive and time-consuming, yet rarely provides any benefit to the beneficiaries. Thankfully, with a little planning, probate is fairly easy to avoid. Trusts, pay-on-death accounts, joint tenancy, and other probate avoidance methods can keep most or all of your estate out of probate, saving your loved ones time and money. Reducing estate tax. Most people won’t owe federal estate tax. But if you expect to leave over $11 million (or $22 million as a married couple), you’ll probably want to use your estate plan to reduce the tax that your estate could owe after your death. If all this sounds overwhelming, please keep in mind that many people need only a simple estate plan. You may be able to prepare all your documents yourself. Or you might discover that you have some pretty complicated estate planning needs that will require advice from a lawyer. Most likely, you’ll find yourself somewhere in between. No matter what your situation, with Plan Your Estate on your side you can go forward informed and empowered to make a smart and effective estate plan. Estate planning is an invaluable gift to yourself and to your loved one. It will feel great to get it done, and you can start right here with Plan Your Estate. (Note: This book contains no estate planning forms, but it does tell you how to get the forms you need.) Cover Title Page Table of Contents Your Estate Planning Companion 1: Your Estate Planning Goals Part I: Setting Your Goals Part II: Laying the Groundwork Part III: Children Part IV: Wills Part V: Probate and How to Avoid It Part VI: Understanding Estate and Gift Taxes Part VII: Reducing or Eliminating Estate Taxes Part VIII: Imposing Controls Over Property Part IX: Taking Care of Personal Issues Part X: Family Business Estate Planning Part XI: Going Further Part XII: Sample Estate Plans 2: Personal Concerns and Estate Planning Avoiding Conflict Leaving Unequal Amounts of Property to Children Providing Care for Minor Children Subsequent Marriages Long-Term Care for a Child With Special Needs Concerns of Unmarried Couples Worries About the Effect of Inheriting Money Disinheriting People, Including Children Communicating Your Decisions to Family and Friends 3: Special Property Ownership Rules for Married People What You Need to Know Marital Property in Community Property States Marital Property in Common Law States Moving to a Different State 4: Inventorying Your Property Instructions for the Property Inventory Worksheet Your Property Worksheet 5: Your Beneficiaries Types of Beneficiaries Primary Beneficiaries Life Estate Beneficiaries and Final Beneficiaries Alternate Beneficiaries Residuary Beneficiaries Gifts Shared by More Than One Beneficiary Establishing a Survivorship Period Explanations and Commentary Accompanying Gifts Disinheritance Simultaneous Death Property You Give Away by Will or Trust That You No Longer Own at Your Death 6: Children Naming Someone to Take Custody of Your Minor Children Naming an Adult to Manage Your Child’s Property How Your Children’s Property Should Be Managed Tax-Saving Educational Investment Plans ABLE Accounts for People With Disabilities Naming Children as Beneficiaries of Life Insurance Leaving Property to Children Who Are Not Your Own Disinheritance Children Conceived After a Parent Dies 7: Wills A Will as the Centerpiece of Your Estate Plan A Backup Will With a Comprehensive Estate Plan What Makes a Will Legal? Types of Formal Wills What Property Cannot Be Transferred by Will? Explanatory Letters Accompanying Your Will Can My Will Be Successfully Challenged? Keeping Your Will Up to Date 8: Probate and Why You Want to Avoid It What Is Probate? Probate Fees Avoiding Probate When You May Want Probate Debts, Taxes, and Probate Avoidance Probate Reform 9: Living Trusts Does Everyone Need a Living Trust? Living Trusts Explained Major Decisions in Creating a Living Trust Creating a Valid Living Trust Keeping Your Living Trust Up to Date 10: Joint Tenancy and Tenancy by the Entirety What Is Joint Tenancy? Joint Tenancy Bank Accounts Joint Tenancy Safe Deposit Boxes Tenancy by the Entirety Joint Tenancy in Community Property States Tax Concerns Affecting Joint Tenancy Drawbacks of Joint Tenancy When Joint Tenancy Makes Sense Creating a Joint Tenancy for Property With Documents of Title Creating Joint Tenancy for Property Without Documents of Title 11: Pay-on-Death Designations, Registrations, and Deeds Pay-on-Death Bank Accounts Naming a Payable-on-Death Beneficiary for Government Securities Naming a Beneficiary for Stocks and Bonds Vehicle Registration Transfer-on-Death Deeds for Real Estate 12: Life Insurance Do You Need Life Insurance? Types of Life Insurance Life Insurance and Probate Choosing Life Insurance Beneficiaries Reducing Estate Tax by Transferring Ownership of Life Insurance Policies 13: Retirement Benefits Social Security Individual Retirement Plans Standalone Retirement Trusts Pensions When You Retire Retirement Plans and Estate Planning Probate and Taxes 14: State Law Exemptions From Normal Probate Will Your Estate Qualify? Using These Rules to Plan Summary of State Law Exceptions to Normal Probate California Exemptions From Normal Probate 15: Estate Taxes Federal Estate Tax Exemptions The Big Picture: Estate and Gift Taxes Will Your Estate Have to Pay Taxes? Calculating and Paying Estate Taxes Reducing Federal Estate Taxes The Federal Income Tax Basis of Inherited Property State Inheritance and Estate Taxes 16: Gifts and Gift Taxes The Federal Gift Tax: An Overview What Is a Gift? How the Federal Gift Tax Works Using Gifts to Reduce Estate Taxes When Not to Give Property Away: Tax Basis Rules Using Gifts to Reduce Income Taxes 17: An Overview of Ongoing Trusts Trusts to Reduce Estate Taxes Ongoing Trusts Used to Control Property Ongoing Trusts and Avoiding Probate What Ongoing Trusts Can’t Do When Ongoing Trusts Begin and End The Trustee Taxation of Ongoing Trusts 18: AB Disclaimer Trusts How AB Disclaimer Trusts Work Is an AB Disclaimer Trust Right for You? Choosing Trustees for an AB Disclaimer Trust Do You Need a Lawyer to Create an AB Disclaimer Trust? 19: Other Estate Tax-Saving Marital Trusts QTIP Trusts Trusts for Noncitizen Spouses: QDOTs Marital Deduction Trusts 20: Charitable Trusts An Overview of Charitable Trusts The Income Tax Deduction A Closer Look at Charitable Remainder Trusts A Closer Look at Charitable Lead Trusts 21: Other Estate Tax-Saving Trusts Generation-Skipping Trusts Irrevocable Life Insurance Trusts Grantor-Retained Interest Trusts: GRATs, GRUTs, and GRITs 22: Disclaimers: After-Death Estate Tax Planning Advantages of Disclaimers IRS Rules for Disclaimers Including Disclaimers in Your Estate Plan 23: Combining Estate Tax-Saving Trusts Combining Two Estate Tax-Saving Trusts Combining a Charitable Trust With Other Estate Tax-Saving Trusts 24: Property Control Trusts for Second or Subsequent Marriages Evaluating Your Situation How a Marital Property Control Trust Works Restricting the Surviving Spouse’s Rights Over Trust Property The Role of the Trustee Working With a Lawyer 25: Trusts and Other Devices for Imposing Controls Over Property Educational Trusts Trusts for People With Special Needs Spendthrift Trusts Sprinkling Trusts Trusts to Manage Your Own Property Powers of Appointment Combining Property Control Trusts 26: Incapacity: Making Medical and Financial Decisions Medical Decisions Financial Decisions Guardianships and Conservatorships 27: Body and Organ Donation, Funerals, and Burials Making Your Own Choices Leaving Written Instructions Donating Your Body or Organs Death Notices and Obituaries Services and Ceremonies Following a Death Funerals Cremation Burials You Can Choose a Green Burial 28: Family Business Estate Planning Operation of the Business Reducing Estate Taxes Avoiding Probate of a Family Business 29: Using Lawyers Hiring a Lawyer Doing Your Own Research 30: After You Complete Your Estate Plan Storing Your Estate Planning Documents Revising Your Estate Plan 31: After a Death Occurs Wills Probate-Avoidance Living Trusts Ongoing Trusts for Estate Tax Savings or Property Management Preparing and Filing Tax Returns Trustee’s Reports to Beneficiaries Collecting the Proceeds of a Life Insurance Policy Obtaining Title to Joint Tenancy Property Digital Assets 32: Some Estate Plans A Prosperous Couple in Their 60s and 70s A Wealthy Couple in Their 70s A Single Man in His 60s A Younger Couple A Single Mother in Her 30s A Widow in Her 80s A Couple in Their 60s, in a Second Marriage An Unmarried Couple in Their 40s Glossary Index Book Registration