Welcome Guest. Register Now!  

LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 09-01-2008, 09:57 PM
TaxGuru's Avatar
Tax Guru
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,413
Blog Entries: 3
Do you have to be a Millionaire in order to have an Estate Plan?

There is a prevailing view that "Estate Planning is just for reserved for the Millionaires!". This is simply a fallacy and the reality is that Estate Planning is for anybody that is concerned about the disposition of their assets after they die.

More importantly, Estate Planning is especially important for people in a number of ordinary life situations such as the following;

1. Married Couples.
It is recommended that each Spouse have a separate Will as Joint Wills can sometimes result in some legal problems in certain States, especially if both the couples die together at the same time or within a short time of each other.

2. Divorced Couples.
For Divorced couples it especially important to establish a Trust to ensure that the children of the divorced couples are protected in the event of the death of their divorced parents. This is especially true if there is concern that assets that were acquired during the marriage of the divorced parents pass to the children of the former spouse!

3. Business Owners.
Business Owners should create an Estate Plan that addresses the succession plan that clearly indicates what would happen to the business when one of the partners or owner dies. It is important the business has sufficient cash flow on hand to either buyout the shares of the deceased partner and continue to function normally as well.

The current Estate Tax law provides a Tax Exemption for Estates that are valued at $2m. But, this exemption is scheduled to revert back to $1m by the year 2011. Hence, unless Congress acts to maintain the current exemptions, it would seem many more Americans would be subject to an Estate Tax!

Thus, it is strongly recommended that one should consider an establishment of a Trusts to protect your Assets from the Estate Tax, especially once a Taxpayer has accumulated assets in excess of $1m.

What is the Current Estate Tax Rate?
The Highest Federal Estate Tax Rate is currently set at 45% until the year 2009. Currently, in 2010 the Estate Tax has been repealed, and after that the tax exemption is reverted back to $1m and the tax rate has been increased to 50%.

What are some of Assets that are included in the Estate?
Some of the assets that are included as part of the Estate are as follows;

1. Stocks, Shares and Bonds.

2. Cash in Bank, Savings Account and Money Market Accounts.

3. Both Personal and Rental Real Estate Property.

4. Retirement Plans.

5. Inheritances.

6. Personal Property, such Cars, Jewelry, Rare Coin Collections and Art Collections etc

Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.

Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Who needs to an Estate Plan? disa Estate Planning 2 09-01-2008 09:57 PM
What is a Cafeteria Plan? Redden Miscellaneous 2 07-23-2008 03:30 AM
What requirements must be met in order to qualify as an S-Corporation? TaxGuru S-Corporation 0 03-12-2008 08:30 PM
how far must my old home be to the new home in order to deduct moving exp's? Allard Miscellaneous 1 06-14-2007 12:24 PM
Which is a better pension plan, 401lk or SEP? mikemoore IRA/Sep 1 01-16-2007 09:36 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 » Income
 » IRA/Sep
 » Medical
 » Payroll
Forum for CPAs
Financial Planning