Estate Planning and Gift Tax Planning

Few wish to talk about this subject, but it is necessary and relatively simple to develop a plan which is best for you. These types of plans can save literally thousands of dollars. Did you know that the top estate tax is 49%!!

Although you can't take it with you, you sure can make it difficult for the government to take it!!

Questions to ask yourself:

• Do you have a will?
• Have you considered a living trust?
• What do you want to happen when you are no longer around to help?
• What is the lifetime exclusion for estates this year?

As we mentioned before, a "balance sheet" can help you determine just what you are financially worth. You might be shocked at the value your government thinks you are worth. You must add life insurance which you own to your balance sheet, even though the proceeds go to someone else. Once you have compiled this balance sheet, you can determine if you have an estate problem. Today, in truth, everyone has an "estate problem", if their estate is over $2,000,000. Simple planning may save you and your loved ones many heartaches and much money over the years.

We can assist you with your financial planning and work with your attorney and/or insurance agent, and/or a trust officer if the need arises. We realize that this is a most private affair and one which is often difficult to discuss. Realize that we are understanding of such situations and can help if you choose.

Some possibilities to think about:

Today, you can give away $12,000 per year per recipient. If your spouse joins you in this gift, you (and your spouse) can give up to $24,000 per year to each recipient. It is possible to give, for example, to the spouses of your children thereby increasing this gift even more. Additionally, the person receiving the gift does not need to be related to you. Remember, these annual gifts do not reduce your once-in-a-lifetime exclusion.

Often you may have property which you will not need for your retirement years, which could be transferred during your lifetime. If it is a large income producer, the future income will be taxed to the recipient, and not to you, and the property will be out of your estate. If it generates no income, but has some large value, then often this property is a candidate for transferring out of your current estate.

Your spouse may receive unlimited transfers either during your lifetime or through your estate. There are no taxes on spousal transfers regardless of size. However, if everything is left to your spouse, then you will fail to use the lifetime exclusion (currently $2,000,000) in the estate of the first spouse to die. Proper planning will allow you to use the exclusion in both estates, enabling you to transfer twice as much to your heirs free of estate taxes. Also, certain life insurance proceeds can be kept out of your estate.

As with any plans, they should be compatible with your life style and the manner in which you desire to leave your estate. The best plan will not work if you are not comfortable with it and do not ultimately follow the plan.

Call us: 620.342.7435

We don't charge for an initial conference. We can discuss your concerns and determine just how we can help you the best. Again, our primary responsibility is to make sure that we can create value for our clients.