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INSIGHT: Consider options, consult professionals to secure estate |
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By Stan Graber For the Sioux Falls Business Journal
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Tuesday, 29 May 2007 |
It is natural for many people to want to put off planning their estates. It’s an uncomfortable thought to anticipate one’s own demise.
In addition, many people believe that only the wealthy require estate planning. Or that all that is involved is tax planning, which can be done later. Unfortunately, they may be wrong on both counts.
 Stan Graber
Your first step should be to assemble a competent, professional estate planning team. Your attorney, financial services professional, insurance agent, bank trust officer and tax professional are all possible members of your team, depending on the size and complexity of your estate.
They can help you complete an analysis of your current estate.
A thorough estate analysis requires gathering materials involving current and future income, property ownership, insurance and legal arrangements. Following is a list of some of the information that should be included:
• Current income.
• Expected deferred compensation.
• Employer-provided and government benefits, as well as individual retirement savings accounts.
• Savings certificates and passbooks.
• Deeds to residences.
• Personal property.
• Life insurance policies of which you are the owner, the insured or the beneficiary.
• Wills.
• Trust agreements.
• Current and expected debts and obligations.
If you begin planning in a timely fashion, there are clear, legitimate methods that allow you to help preserve your estate while satisfying both the tax collector and the courts. Some of these methods are:
• Minimize estate taxes. It is important to evaluate whether the size of your estate and your plans to transfer assets to children or other beneficiaries will expose you to estate taxes.
• Plan a gifting program. It may be possible to shield assets from taxation by making gifts to family members.
• Draft a will. A will is a formal, legal document specifying your wishes for the distribution of your estate in the event of your death.
• Consider a trust. Trusts are powerful tools designed to help individuals handle a variety of family and tax-related problems.
• Plan charitable bequests. The value of property transferred for charitable or public purposes might be deductible.
• Take advantage of life insurance. First, it can provide immediate cash for your spouse or other beneficiaries. Second, a life insurance trust possibly can be established that will prevent the policy proceeds from being included in your estate. Your heirs may use the proceeds of the trust to help pay the estate tax bill, avoiding the need to sell estate assets.
• Title assets properly. In certain cases, it may be best for married couples to own property together. In other situations, it may be most tax efficient to own property separately.
Graber owns Stan Graber Financial Services Inc.
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