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No one wants to face death or to think about their estates. But, unfortunately, death
is a fact of life and your hard earned money will go to taxes instead of your heirs, if
you don't pay attention now. Q. I hardly have anything, so why do I need to
be concerned?
A. You may have more than you think. There is an estate tax on everything in excess of
$3,500,000. That includes the house, car, jewelry, cash, stocks, bonds, retirement funds,
insurance, etc., etc.
Q. I have in excess of the unified credit (excluded assets) but I
understand that if I leave it to my wife (or husband) there still will be no tax.
A. Yes, that's correct. But then, when your spouse dies (assuming he/she did not remarry),
the estate is then taxable. At that time your spouse's assets plus the assets you owned
are now added together, and the amount over the unified credit (excluded assets) is then
taxable.
Q. Is there any way out of this tax?
A. Yes! There is a way to protect your spouse and children and pay NO estate taxes on the
amount up to twice the unified credit (excluded assets). It's not really difficult but it
does require planning.
Q. If I inherit property that I later sell, is there an income tax to pay?
A. Perhaps. The beneficiary gets the asset at the face value shown on the estate tax
return at either the date of death or the alternate valuation date. A sale for more than
amount results in a gain, and for less than that value, in a loss. The method of preparing
the estate tax return (Form 706), as you can see, becomes very important.
Q. Is it complicated to prepare an estate plan?
A. Yes and no. We will give you a booklet to fill out and talk to you about your thoughts
about leaving your assets. We do not want the "tail to wag the dog". We want
your plan to accomplish what it is you want. Then, and only then, do we suggest various
approaches to save taxes while still accomplishing your wishes.
Q. If we didn't plan in advance, is there anything to do after death?
A. Believe it or not, there are things to do. When we do the actual estate tax return
(Form 706), we may have suggestions for after death tax moves, such as disclaimers, etc.,
so you do get one more chance.
Q. How do we start?
A. Call us. We will send you our Estate Planning Booklet. After you have filled it out, we
will discuss it and give you a written summary of our thoughts. Then after the tax
planning is agreed upon, you will take it to an attorney who will write your will.
This booklet offers general tax, financial, and business suggestions. Because of the
complexities of the law, the constant changes resulting from new developments and the
necessity of determining whether the material discussed is appropriate to a particular
individual or business it is important that you call us before implementing any of the
suggestions mentioned.
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