Trust and Estate-Gift Tax Planning

Most people don't like to think about death, much less plan for it. Since there is no legal requirement to do end-of-life planning, many of us put it off, or worse yet, never get around to it. Yet the truth is that investing a little time in planning can pay off in lower taxes and administrative costs, increased financial security for your loved ones, and best of all, your own peace of mind.

Don't underestimate the importance of a Trust.

A properly executed trust document can save money on probate fees and attorney costs, and it allows for a faster transfer of assets. Even if your assets aren't that large, a trust can make life easier and less expensive for your beneficiaries. Basic trust documents allow you to stay in control of the fundamental financial and personal decisions of your life and death, and your successor trustee can take over if you become incapacitated.

Estate planning is not just for the wealthy.

Tax implications kick in depending on the value of your estate and the federal and state laws in effect at the time of your death. The value of your home, your personal property, your business interests, your collectibles, your investments including your retirement accounts, and possibly your life insurance can all enter into the estate equation. Use our estate planning calculator to help determine what your estate is worth.

Here is a list of essential documents that even the simplest trust/estate plan should include:

  • A will. Where there's a will, there's a way — a way to honor your wishes. How, when, and to whom will your property go? Who will be the guardian of your minor children? Without a will, these decisions will be made by strangers in a court system using rules that could be contrary to your intentions. Keep in mind that a will controls only the distribution of your probate estate. It does not control assets held in trust, certain joint assets, retirement accounts, or life insurance policies on which you name beneficiaries.
  • Information memo. Keep a list of your insurance policies, bank accounts, investment and retirement accounts, businesses you own, outstanding debt, credit cards, tax-related documents, income sources, and other financial information. In addition, include the names and phone numbers of your accountant, lawyer, doctors, and insurance agents.
  • Durable power of attorney. This critical document enables someone you choose to conduct your financial affairs if you become incapacitated.
  • Directive to physicians. A directive to physicians (also called a living will) documents the medical treatment you wish if you become incapacitated. It lets you name the individual(s) you wish to make your medical decisions if circumstances keep you from making them yourself.