With
the $5.12 million per person exemption from federal estate tax ($10.24 million
for married couples), most of the estate planning “talk” recently has been on
the planning opportunities available to affluent families. However, the need
for estate planning remains for everyone.
According
to a recent Forbes article, 55% of Americans do not have even a will. The
article suggests the following “common sense” guidelines for determining the
extent one needs an estate plan:
(1)
Minor children – Everyone with minor children needs, at a minimum, to nominate guardians for their children. The author suggests the parents select “the first
one that comes to mind” and “don’t over think it.”
(2)
Beneficiary Designations – For those with less wealth, beneficiary designations
may control how most of their property passes. But for everyone, are these
designations current, and do they pass all of the property as the client
desires?
(3)
Home Ownership – The article recommends a trust for homes and investment
property to avoid probate; and not simply adding another to title because of
the numerous problems this “simple solution” creates.
(4)
Affluence – Popular belief is that the current exemption means that only affluent
families need concern themselves with the federal estate tax, but as the author
notes, the exemption is schedule to decrease to $1 million per person at the
end of 2012. What will the exemption amount be in the year of death (when it really
matters)?
(5)
Special Circumstances – Those with special circumstances (e.g., a special needs
child, a spendthrift grandchild, charitable interests, etc.) definitely need an
estate plan.
(6)
And for everyone . . . Powers of Attorney – the author recognizes that everyone
needs, at a minimum, financial and medical powers of attorney
Remember
that estate planning is not permanent, and if circumstances change plans can be
update d. But it’s better to have something in place when needed than nothing
at all. Speak with an estate planning attorney in Menlo Park, California for more information.
The
full Forbes article is available online at
Common Sense Estate Planning
