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Estate Planning
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Federal estate taxes go as high as 45%, and most states also levy a tax against your estate, your assets, all that you have earned, built and accumulated during your lifetime.
The federal government and most of the states put a tax on your assets before they are transferred to your heirs. This can become very complicated, so it is important that you tell your heirs just what your plans are; that is, who gets what. Discuss it with them often enough so that everyone understands your plans and is in agreement. Assets in your retirement plans, life insurance policies, annuities, and some savings accounts will be paid out to your named beneficiary at your death. Property co-owned with your spouse or other adult will pass to your co-owner.
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If you do not have a written estate plan, your assets will be divided and distributed according to the laws of the state you live in. Your written estate plan can be either a Will or a Living Trust. A will requires that your heirs hire an attorney (this is mandatory) and go to court where the judge will see that your plans are followed exactly. This takes time, often one to two years, and the attorney is paid 2 to 10% out of the estate.
Your best approach will be to use a good estate attorney and set up a trust. With a living trust, you appoint a Successor Trustee to manage your estate and distribute it after your death, or if you become mentally incompetent or physically disabled. This successor trustee is legally responsible for managing and distributing your estate exactly as spelled out in your living trust. This is normally fast and simple and no probate court is involved.
Peterson Money Books
Book: RICH By Choice, by Erlend Peterson, CFP
A Complete Guide to Your Financial Success
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