EASY AND EFFECTIVE?

I discussed in the last WealthWISe how my approach to estate planning is a quicker less stressful process. So there is no reason to put it off. In fact, if you have a will or a trust designed to save estate taxes prior to 2010, I should be able to greatly simplify your estate and reduce the cost. For example, if you have an insurance trust-run, don’t walk to my office.

For example, a client recently came in. I will call him Mr. Smart because he came in to review and update his estate plan. In 2005 he and his spouse obtained wills from a prominent estate planner. Because the Smarts’ estates were worth roughly $3,000,000, they expected to owe estate taxes upon their deaths. They wanted to use life insurance to pay the taxes, but unfortunately, the life insurance itself was estate taxable.

They were advised to use to form an irrevocable life insurance trust (ILIT) to own the life insurance to pay the estate taxes. That way the life insurance would not be included in the estate. Of course, they had to pay for the trust, and every year they had to pay for the Trustee, the life insurance, and so on.

Now that there is no Tennessee inheritance tax and the first $5,490,000 of your estate is not subject to federal estate taxes, this ILIT is expensive and unnecessary. I was able to terminate the trust and save the Smarts a lot of money.

My Advice: Review your estate planning, especially if it is older or your beneficiaries or property have changed.

If you are ready for estate planning, get started with ease. Download Wis’ Estate Package

Make a difference! Clients often fail to say what happens to their estate if they and their immediate family pass away.  Instead of giving your estate to distant relatives I suggest that you make a difference! Give your estate to a charity that means something to you! For maximum effect, work with an organization like the Community Foundation of Memphis.