Most of us don't put nearly as much though as we should into planning how our estates will be distributed, and the estimates are that nearly two-thirds of Americans die intestate, without having prepared a will. While their estates will eventually be distributed according the inheritance laws in their states, those laws may not reflect at all how they would have chosen to pass on their assets. If you want to avoid that situation, finding a firm of experienced estate planning attorneys is your best answer.
Estate plan trusts attorneys have a comprehensive understanding of the probate process in your state, as well as up-to-the-minute knowledge of estate tax laws. They will help you ensure that your final wishes regarding the distribution of your estate, as well as your health care and life support wishes, are carried out. Estate planning attorneys can help you regardless of whether you want to draft a simple will for a small estate; to change an existing will so that it reflects a change in your financial status; to establish a living trust; or to set up an estate plan which includes a will, trust, and your health care and life support directives.
The reality is that the current tax law repeals the federal estate tax for only one year, 2010. Depending on the year of death, the estate tax credit amount, the corresponding exclusion amount (which is the amount that each person can pass to beneficiaries free from federal estate taxes) and the top tax rate vary significantly. For instance, in 2009, a person can pass up to $3.5 million to his or her beneficiaries' federal estate tax free. For 2010 the federal estate tax was repealed. In 2011, the estate tax is scheduled to return with a significantly lower tax free amount, $1 million, and a significantly higher top tax rate at 55%. This quirk in the law is known as the "Sunset Provision" and has caused a lot of confusion among estate planners and their clients.
Permanent repeal of the federal estate tax requires an affirmative vote of 60 Senators. This is not an easy task. After all, repealing the federal estate would eliminate a significant source of federal revenue. Just how much revenue would the repeal of the federal estate tax eliminate? The cost of repeal through 2015 (including the current rates and exemption amounts) is estimated at $290 billion (according to the Joint Tax Committee, a bipartisan group). Other sources have estimated that the cost would be even higher. In addition to the cost of repeal, the federal government has been hit with several large budget items including Hurricane Katrina, the Iraq war and a growing deficit. Additionally, the election cycle always plays a role. Faced with these significant budgetary items, repeal of the estate tax appears to be less likely. During the summer of 2005, there was much talk in Washington, D.C. of estate tax repeal. At one point, the House of Representatives voted in favor of repeal and the issue was put before the Senate for consideration. 58 Senators (out of a necessary 60) voiced their support for repeal in an informal straw poll. There was a general feeling in Washington, D.C. that the issue of repeal would come to a vote in the Senate. Because of the factors previously listed (Hurricane Katrina, Iraq war, deficit concerns, etc), the issue never did make it to a final vote in the Senate.
Concerning the issue of expense, in California the ordinary attorneys and personal representative fees are determined by statute, and are set out specifically in the Probate Code [California Probate Code 10800]. Extraordinary expenses may sometimes be charged, but the court must permit the added expense. Sometimes expenses may be saved if the personal representative waives his or her fee. If the executor or administrator is a family member, rather than an institution or professional, fees are often waived to save expense. In the final analysis, trusts are usually more expensive than wills to prepare, but wills administered through a court supervised probate are usually more expensive and time consuming than administering a trust. However, at least in California, there is another possible alternative: An expedited procedure for small estates (i.e., estates under $100,000, excluding exempted property) [California Probate Code 13100], which does not require opening and administering a probate estate. Therefore, in some cases opening a probate may not even be necessary.
If you have children from an earlier marriage and intend to remarry, changing your estate plan so that you will include your new spouse among your heirs, there is a possibility of conflicted feelings among your children. Estate planning attorneys can suggest ways in which you can begin to distribute the assets you intend to leave to you children assets among your children during your lifetime without it causing tax consequences. Estate tax attorneys will draft and execute all the legal paperwork, including your will, living or testamentary trust, health care directive, and powers of attorney which are necessary to carry out you wishes. They will also do the research needed to make sure that the tax consequences to your estate are minimized, consulting with tax experts if needed.
Estate plan trusts attorneys have a comprehensive understanding of the probate process in your state, as well as up-to-the-minute knowledge of estate tax laws. They will help you ensure that your final wishes regarding the distribution of your estate, as well as your health care and life support wishes, are carried out. Estate planning attorneys can help you regardless of whether you want to draft a simple will for a small estate; to change an existing will so that it reflects a change in your financial status; to establish a living trust; or to set up an estate plan which includes a will, trust, and your health care and life support directives.
The reality is that the current tax law repeals the federal estate tax for only one year, 2010. Depending on the year of death, the estate tax credit amount, the corresponding exclusion amount (which is the amount that each person can pass to beneficiaries free from federal estate taxes) and the top tax rate vary significantly. For instance, in 2009, a person can pass up to $3.5 million to his or her beneficiaries' federal estate tax free. For 2010 the federal estate tax was repealed. In 2011, the estate tax is scheduled to return with a significantly lower tax free amount, $1 million, and a significantly higher top tax rate at 55%. This quirk in the law is known as the "Sunset Provision" and has caused a lot of confusion among estate planners and their clients.
Permanent repeal of the federal estate tax requires an affirmative vote of 60 Senators. This is not an easy task. After all, repealing the federal estate would eliminate a significant source of federal revenue. Just how much revenue would the repeal of the federal estate tax eliminate? The cost of repeal through 2015 (including the current rates and exemption amounts) is estimated at $290 billion (according to the Joint Tax Committee, a bipartisan group). Other sources have estimated that the cost would be even higher. In addition to the cost of repeal, the federal government has been hit with several large budget items including Hurricane Katrina, the Iraq war and a growing deficit. Additionally, the election cycle always plays a role. Faced with these significant budgetary items, repeal of the estate tax appears to be less likely. During the summer of 2005, there was much talk in Washington, D.C. of estate tax repeal. At one point, the House of Representatives voted in favor of repeal and the issue was put before the Senate for consideration. 58 Senators (out of a necessary 60) voiced their support for repeal in an informal straw poll. There was a general feeling in Washington, D.C. that the issue of repeal would come to a vote in the Senate. Because of the factors previously listed (Hurricane Katrina, Iraq war, deficit concerns, etc), the issue never did make it to a final vote in the Senate.
Concerning the issue of expense, in California the ordinary attorneys and personal representative fees are determined by statute, and are set out specifically in the Probate Code [California Probate Code 10800]. Extraordinary expenses may sometimes be charged, but the court must permit the added expense. Sometimes expenses may be saved if the personal representative waives his or her fee. If the executor or administrator is a family member, rather than an institution or professional, fees are often waived to save expense. In the final analysis, trusts are usually more expensive than wills to prepare, but wills administered through a court supervised probate are usually more expensive and time consuming than administering a trust. However, at least in California, there is another possible alternative: An expedited procedure for small estates (i.e., estates under $100,000, excluding exempted property) [California Probate Code 13100], which does not require opening and administering a probate estate. Therefore, in some cases opening a probate may not even be necessary.
If you have children from an earlier marriage and intend to remarry, changing your estate plan so that you will include your new spouse among your heirs, there is a possibility of conflicted feelings among your children. Estate planning attorneys can suggest ways in which you can begin to distribute the assets you intend to leave to you children assets among your children during your lifetime without it causing tax consequences. Estate tax attorneys will draft and execute all the legal paperwork, including your will, living or testamentary trust, health care directive, and powers of attorney which are necessary to carry out you wishes. They will also do the research needed to make sure that the tax consequences to your estate are minimized, consulting with tax experts if needed.
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