5. Addresses Special Circumstances - continues

This blog post continues from October 24 when we started to look at the 5th benefit of estate planning, addresses special circumstances.

Remember the other 4 of the 7 essential benefits of estate planning are;

(1) protects assets

(2) saves money

(3) creates a legacy

(4) distributes wealth.

Today we continue to discuss how estate planning addresses special circumstances. In the case of Linwood and Jordan who are same sex partners, they have to address their property interests through advance planning. If either Linwood or Jordan died without a will, no property would go to the other unless there was joint ownership, a trust or beneficiary designation with the partner's name. There would have to be planning to minimize the inheritance tax since the 0 rate would not apply to unmarried individuals.

What about their son, Julian? We will discuss his special circumstances tomorrow. Leave your comments here or contact us at http://www.ythlaw.com/

5. Addresses Special Circumstances

We have been exploring the 7 essential benefits of estate planning; (1) protects assets (2) saves money (3) creates a legacy (4) distributes wealth. Today we discuss number (5) how estate planning addresses special circumstances. Let's take a look at Linwood's and Jordan's situation.

Linwood and Jordan are the same sex and have lived together for twenty-five years. They do not live in a state that recognizes gay marriages. They adopted their special needs son Julian, who was 10 years old at the time of the adoption. Julian has thrived and progressed significantly over the last sixteen years with the love, attention, and hard work of his parents. Linwood's skills as a nurse have been most helpful to Julian. Julian’s Seeing Eye dogs have helped, and his current dog is an integral part of his life. All of this has enabled Julian to live on his own with the support of state programs.

What issues will Linwood, Jordan and Julian face and how can those issues be addressed through estate planning? We will begin to look at the answer to these questions and any that you may leave here or when you contact us at http://www.ythlaw.com/

4. Distributes Wealth

Over the last few days, we have discussed 3 benefits of estate planning; (1) protects assets; (2) saves money; and, (3) creates a legacy. The fourth benefit of estate planning is distributes wealth. The following is from my book Stop! What Are You Waiting For? Your Step-by-Step Guide to Estate Planning.

"Ria enjoys the international travel required of her successful technology consulting business. During her extensive traveling and demanding business, her closest and dearest sibling Michelle has taken on the full responsibility of the care of their parents, whose health has been rapidly failing. Her two older brothers have remained distant from the family and provide no support or interest in the care of their parents. Though Ria never married, she is considering adopting children.

In recent times, Ria has thought about her estate and how it;might be distributed when she dies. She is especially concerned about the ramification of any adoption."

Should the state control the distribution of Ria’s assets? What would happen to all her wealth if she has no husband and no children.

Let's learn more about Ria tomorrow. Leave your comments here or contact us at http://www.ythlaw.com/

3. Creates A Legacy

Today, we continue our discussion regarding the benefits of estate planning. The first two,
1. Protects Assets and 2. Saves Money, have already been discussed over the last few days. This third benefit, Creates A Legacy, is, in my opinion, the most important because we all have a legacy to leave. The problem is that most of us fail to document that legacy or even more problematic fail to see the legacy worth of our life.

There has not been a single client that I have counseled who did not have a legacy worth documenting in some way. Remember, estate planning is a process as well as the tangible development and execution of legal documents. And it is that process that gives my practice its competitive edge. I may guide someone into starting a business, a foundation or a charitable organization because of what I learn about them during the estate planning process. I may suggest writing a book, journaling, speaking or putting on a photo/art/sculpture exhibit. Whether it is a financial gain to me or an Aha moment for my client, in my practice the estate planning process is always mutually beneficial.

Tomorrow, let's revisit Max and Margaret to look at their legacy and how estate planning will help. Leave your comments here or contact us http://www.ythlaw.com/

2. Saves Money - Continued

We continue today to discuss saving money through effective estate planning. We met Max and Margaret yesterday whose estate is worth well in excess of 5 million dollars. How can estate planning help them?

Well, Max and Margaret can reduce or eliminate their federal estate tax. Throughout your lifetime you, like Max and Margaret, have accumulated wealth in one form or another. Under the current federal estate tax law, individuals have an available tax credit against the ultimate estate tax due.

This tax credit is a direct dollar-for-dollar reduction of Max's or Margaret's tax liability, compared with tax deduction, which reduces Max's or Margaret's tax liability only in proportion to his or her tax bracket. Therefore, for Max and Margaret, each has a tax credit against the ultimate estate tax.

However, the estate tax is not due, for Max or Margaret, until the last one dies. This is because property left to a spouse is tax free. If Max is the first to die, he would transfer his estate to the Margaret free of an estate tax. It is not until the death of Margaret that the entire estate is subject to estate tax.

At that time, the tax credit of Margaret would be available to offset the amount of estate tax due. With advance planning, the tax credit available to the Max can be preserved and would then be available at the death of Margaret to further reduce the estate tax due.

We will continue to explain this significant benefit tomorrow. Stay tuned. Contact us at http://www.ythlaw.com/ with your questions or leave your comments here.