What are the objectives of a good estate plan?
The primary objectives of a good estate plan are to first review and summarize your assets and then set forth your personal desires with respect to the disposition of your assets. The secondary objectives include (i) reducing any estate tax exposure, (ii) reducing and deferring any income tax exposure, (iii) providing management and investment controls, (iv) protecting assets from creditors and (v) providing administrative efficiency.
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What legal, tax and asset protection services does our firm offer?
Our estate planning and estate administration services consist of two main functions: (i) rendering advice concerning alternatives to accomplish your objectives and (ii) implementing your decisions after you have considered our advice.
Our advice can include: (i) review of the extent and ownership of assets, (ii) recommendations concerning basic planning techniques and, (iii) where appropriate, recommendations concerning more sophisticated estate tax, income tax, asset protection and other lifetime and post mortem planning techniques.
The implementation of our advice can include (i) preparation of a financial analysis of your assets, (ii) wills, powers of attorney, health care proxies, living wills, revocable trusts, irrevocable trusts, partnership agreements, corporate and limited liability company agreements, disclaimers, etc., (iii) explanatory memoranda discussing our advice and summarizing your documents, (iv) preparation of estate tax returns, fiduciary income tax returns, (v) representation in estate and income tax audits and (vi) representation in estate litigation.
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When will your estate be subject to a federal estate tax exposure?
In general, if your assets are not in excess of the federal estate tax exemption equivalent at the time of your death, your estate will not be subject to estate tax exposure. The estate tax exemption is presently $1,000,000 and under present law will be gradually increasing to $3,500,000 in 2009. The Federal estate tax is scheduled to expire during 2010 and then be reinstated in 2011. If you are married, then with proper planning, the available federal exemption equivalent can be used in both estates. A schedule of the presently existing estate tax rates and exemption equivalents is found at Schedules [S-1]. A summary of the changes made by the Tax Reform Act of 2001 is found at Articles [A-1].
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What tax reduction techniques can be considered?
Tax reduction techniques that can be considered include: (i) disclaimers, (ii) formula marital provisions, (iii) family limited partnerships, (iv) insurance, (v) life insurance trusts, (vi) annual gifting program, (vii) grantor annuity trusts, (viii) grantor uni-trusts, (ix) private annuities, (x) sale to a grantor trust and (xi) charitable remainder trusts. A Memorandum of the Tax and Other Planning Techniques that was sent to our clients in July 2001 is found at Articles [A-2].
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Can tax reduction techniques be implemented after death?
Yes. There are several tax reduction techniques that can be used after death to provide estate tax savings and income tax savings or deferral. These include: (i) disclaimers, (ii) correction of less than optimal retirement beneficiary designations, (iii) exercise of available elections, such as selection of valuation date, tax year for the estate, claiming expenses as estate tax or income tax deductions, timing of distributions to beneficiaries and (iv) allocation of Generation Skipping Tax Exemption.
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What asset protection techniques can be considered?
Asset protection techniques that can be considered include: (i) trusts for a minor or person under a disability, (ii) by-pass trusts under a will or revocable trust, (iii) outright gifts, (iv) family limited partnerships, (v) Medicaid trusts and (vi) offshore trusts.
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How often is it appropriate to review your will and estate plan?
It is appropriate to review and update your estate plan when any of the following occur: (i) changes in your personal family situation, (ii) substantial increases or decreases in your assets or expectations as to assets and/or (iii) changes in the estate tax or income tax law that may affect the planning techniques that were included in your estate plan. Even if no specific changes have occurred, it is advisable to review your estate plan in substantial estates every 5 years and with lesser estates every 10 years.
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