The proceeds of a life insurance policy are included in the insured’s taxable estate at death. If the decedent’s taxable estate exceeds the federal estate exemption (currently $5.45 million), estate tax is due. For some, ownership of a large life insurance policy may trigger estate tax liability at death. An irrevocable life insurance trust can be a useful estate…
After a long and happy life, Grandpa Watkins moves on to the great beyond. He leaves a Last Will and Testament, duly signed and witnessed, in which he expresses his desire to have his assets divided equally among his two sons and two daughters. Unfortunately, several years prior to Grandpa Watkins’ death, his eldest daughter, Lilabeth, was killed in a…
It’s the classic movie scene: Three people are trapped underground with little hope for a timely rescue. The first curls up into a ball and prepares for death. The second starts talking about missed opportunities. The third takes out a small notebook and writes a will. When their bodies are discovered, the third person’s will is also found. But is…
Gifting to your heirs before you die has a huge tax savings for you, and possibly timing for your heirs. Gifts of money or property allow you to provide your heirs with funds or property when it will have the most significant impact and it is tax-free. Whether providing a down-payment on a home, sending your grandchildren to college, or…
All newlyweds hope for “happily ever after.” Unfortunately, for almost half of Americans who wed, that dream does not reflect reality. Experts say between 40 and 50 percent of all marriages in the United States will end in divorce. Every 10 to 13 seconds someone legally ends their marriage. That means assets accrued before and during marriage may ultimately wind…
Estate planning is a critical necessity when someone is diagnosed with a terminal illness: It is vital that the proverbial “house” be put in order. Timing quickly becomes a concern. At a certain stage in a terminal illness, it may become difficult to ascertain desires, or identify the information required, to carry out effective estate planning. In addition, mental competency,…
Aunt Minnie may appear to be a little flighty and forgetful, but does that mean she is incapable of creating and legally executing (signing) a will? The answer is complicated. The preparation of an estate plan, which may include a will, trust, and/or other documents, involves many steps. Assets and liabilities must be identified and decisions need to be made…
Why do people avoid estate planning? A recent study found that some estate holders believe they don’t need an estate plan. They think a spouse or their children will automatically receive any assets they have. Others claim estate matters are too complicated to deal with or estate planning is too expensive and others say it simply takes too much time.…
Pre-planning protects both parties in a second marriage. Love can be a many-splendored thing, but when it results in a second marriage, careful estate-planning becomes a necessity. Second marriages are a blending process, often of children and assets. Prior to marriage, it is important to discuss your intentions concerning those assets and your heirs. While it is hoped that newlyweds…
A personal representative (or “ executor”) of an estate has many tasks and responsibilities. However, the California Probate Code allows a personal representative to claim a fee for services. The amount of compensation an executor may receive is based on the total value of the probate estate. The value of a probate estate is the sum of all probate assets.…