Why You Should Have an Estate Plan

The 2008 Presidential election is now over. It would appear that a "Change is coming" philosophy, may "CHANGE" the estate tax rates(increased) and such change may affect your current estate plan.

This "changed" enviroment should cause you to re-examine your present estate plan to take advantage of current tax laws and adjust for the future. In addition to taxes there are other non tax reasons to re-examine your estate planning and update your plan. You should re-examine your estate plan periodically and if any items listed on the following checklist impact you or a family member, you should consider changing your plan: 

I have made changes to my life insurance(either beneficiaries or amounts of coverage)

The value of your estate has changed

Your medical condiditon and/or medical conditions of family members has changed

You or a family member has gone through a divorce and/or a family member has died

You are contemplating re marriage and may need a premarital agreement

You want a change in the management of your estate after your disability or death(Trustees or Personal representatives)

Adiitional Children or Grandchildren and you want to provide for them.

You want to start a gifting program for your family or Charity

You have entered into a business arrangement and want to provide for the disposition of this asset on your death or disability

Retirement

Receipt or expected receipt of an inheritance

The above list is by no means all inclusive but designed to provoke you to think about your current plan.

In addition to "updating" your wills and trusts, you should also have in place "Living Wills" and Durable Powers of Attorney. These documents allow you to have a "say" in what happens to you and who manages your assets in the event of your disability and sickness.

From an Estate Tax standpoint given the current climate of increasing deficits and a new President, a "Change may come" to the Federal estate tax. At the time this article is written the Federal exemption from estate tax is million dollars per person. This amount will rise to $3.5 million dollars per person in 2009. ln 2010, the amount of the federal exemption is unlimited. In 2011, the amount of the federal exemption is set at $1 million dollars. It seems very likely that a change will come, it is in your best interest to take advantage of current estate tax law and plan accordingly. Ways to plan and take advantage of the current tax scheme are as follows: 

Make gifts to your family. In 2008, you can make annual gifts free of tax to anyone not to exceed $12,000.00 per year. In 2009, this amount rises to $13,000.00 per person.

Establish 529 plans or college Savings accounts(then YOU can gift more than the annual exclusion amount set forth above without using up your lifetime $1 million dollar gift tax exclusion).

Consider charitable gifts from your retirement plan to a Charity. These distributions will  result in income tax savings for 2008 and 2009, if the distribution is properly structured. 

These ideas are not "exclusive" but are set forth to make you  think  about current estate plan. Please feel free to contact this office  to impliment your new or updated estate plan.