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A spendthrift trust can act as a wealth preserver
Tax planning is only a small component of estate planning — and usually not even the most important one for most people. The primary goal of estate planning is to protect your family, and saving taxes is just one of many strategies you can use to provide for your family’s financial security. Another equally important…
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What are the duties of an executor?
A key decision you must make when drafting your estate plan is who to appoint as the executor. In a nutshell, an executor (called a “personal representative” in some states) is the person who will carry out your wishes after your death. Let’s take a look at the specific duties and how to choose the…
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Achieve multiple estate planning goals with one trust: A CRT
For many people, two common estate planning goals are contributing to a favorite charity and leaving significant assets to your family under favorable tax terms. A charitable remainder trust (CRT) can help you achieve both goals. ABCs of CRTs Typically, you set up one of two CRT types (described below) and fund it with assets…
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Taking the mystery out of the probate process
Few estate planning subjects are as misunderstood as probate. Its biggest downside, and the one that grabs the most attention, is the fact that probate is public. Indeed, anyone who’s interested can find out what assets you owned and how they’re being distributed after your death. And because of its public nature, the probate process…
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Making defined-value gifts may benefit your estate plan
Time is running out to take advantage of the current federal gift and estate tax exemption ($13.61 million for 2024). Absent action from Congress, the amount will drop to an inflation-adjusted $5 million in 2026. One way to make the most of the current record-high exemption amount is to give substantial gifts to your loved ones, thus…
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Undoing an irrevocable life insurance trust is possible
Life insurance can be a powerful estate planning tool. Indeed, it creates an instant source of wealth and liquidity to meet your family’s financial needs after you’re gone. And to shield the proceeds from potential estate taxes, thus ensuring more money for your loved ones, many people transfer their policies to irrevocable life insurance trusts…
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Filing a joint tax return for the year of a spouse’s death can be beneficial
Surviving spouses are faced with many financial and tax-related decisions. One critical issue to consider is whether to file a joint or separate tax return for the year of the spouse’s death. Timing of the final tax return When a person dies, his or her personal representative (called an executor in some states) is responsible…
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Estate planning for residential real estate with a qualified personal residence trust
Do you own your principal residence? If so, you’re likely aware that you can benefit from the home’s build-up in equity, realize current tax breaks and pocket a sizable tax-exempt gain when you sell it. And from an estate planning perspective, it may be beneficial to transfer ownership of your home to a qualified personal…
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Provide for multiple generations using a dynasty trust
When creating estate plans, people generally take their children and grandchildren into consideration and plan accordingly. For those who would like to plan beyond the next two generations, using a dynasty trust may be the answer. A dynasty trust can preserve substantial amounts of wealth — and potentially shelter it from federal gift, estate and…
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A self-directed IRA can benefit your estate plan — but know the risks
Traditional and Roth IRAs can be powerful estate planning tools. With a “self-directed” IRA, you may be able to amp up the benefits of these tools by enabling them to hold alternative investments that offer potentially greater returns. However, self-directed IRAs may present pitfalls that can lead to unfavorable tax consequences. Therefore, you need to…
