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Estate Planning

You’ve worked diligently and hard for the life you have. It’s critical that you plan to make sure your spouse and heirs receive the wealth you’ve worked so hard for.

How can you pass this wealth on with the smallest tax liability and the greatest benefit to your loved ones?

Don’t wait to start developing you’re estate plan. We’re here to help guide you!

Put a plan in place

An estate plan ensures a proper transition of your estate to your family and loved ones after you die.

Several elements of an estate plan

  • A Will; assignment of power of attorney; and a living will or health-care proxy (medical power of attorney). For some, a trust may also make sense, when formulating a plan; you must consider both federal and state laws that govern estates.

Where to Start?

  • Inventory your assets, which can include your investments, retirement savings, insurance polices, real estate or business interests. Then determine whom do you want to inherit your assets? Whom do you want handling your financial matters if you’re incapacitated? Whom do you want making medical decisions for you if you become unable to make them for yourself?

Who needs a will?

  • Everyone does. A will informs others exactly where you want your assets distributed when you die. It’s also the best place to identify and name guardians for your children. Dying without a will, also known as dying “intestate” - can be an expensive venture for your heirs and doesn’t allow you to have any say whatsoever as to whom receives your assets. Even if you have a trust, you still need a will to address any holdings outside of that trust should you die.

Trusts - regardless of your Net Worth, you probably should have one.

  • Trusts are legal mechanisms that allow you to set conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay, and publicity of probate court. In some cases, they also offer greater protection of your assets from creditors and lawsuits.

Communicate your plan with your heirs

  • By being clear and upfront about your intentions, your heirs are less likely to dispute, or conflict amongst one another.

Federal Estate Tax Exemption

  • The amount you leave to heirs free of federal tax changes regularly. The estate tax reached $3.5 million in 2009, and then phased out completely in 2010, but only for a year. The tax will be reinstated in 2011 at $1 million.

Tax free money to your spouse

  • You may leave an unlimited amount of money to your spouse - tax-free. But this isn’t always the best tactic. By leaving all of your assets to your spouse, you don’t utilize your estate tax exemption and instead wind up increasing your surviving spouse’s taxable estate. That means your dependents (if applicable) are likely to pay more in estate taxes if your spouse leaves them the money when he or she dies. In addition, it defers the tough decisions about the distribution of your assets until your spouse’s death.

Give gifts tax-free, and reduce your estate

  • You may give up to $13,000 a year to an individual ($26,000 if you’re married and giving the gift with your spouse). You may also pay an unlimited amount of medical and education bills for someone if you pay the expenses directly to the institutions where those bills were incurred.

Charitable gifts that keep on giving

  • If you donate to a charitable gift fund or community organization, your investment grows tax-free and you can chose the charities to which contributions are given both before and after you die.

Whether you have a plan or not a Foundation Retirement Services Advisor can recommend tax-efficient methods to assist in handing your wealth down to the next generation. Give us a call at (866) 334-9114.