Death and Taxes: How To Prepare

The repeal of the estate tax is sun set. It is doubtful that the Obama administration will have it rise again. This means a readjustment to 2002 rates following the 2010 fiscal year. Few are happy about it, but rather than complain, you can control what they can. It begins with a comprehensive review of exactly where you are in your estate planning process.

The following is a checklist of items needed for baby boomers that are concerned about estate planning and their family.

  1.  List all assets and liabilities accurately. Include regular payment dates and amounts due.
  2.  Provide complete information about assets other than cash or securities. Real estate, automobiles, and boats are examples. Indicate whether these assets are in your name, or if they are owned jointly with your spouse or another individual. Also be sure to include the location, especially if out of state .
  3. Indicate names, ages, and addresses of family members of friends you intend to name as beneficiaries.
  4. If you currently have a will on file with an attorney or financial institution, give a copy of the document to your financial advisor or another trusted individual.
  5.  Include estimations, current balances, and projections, if available, of all employee benefits, plan, and entitlements, such as 401(k) plans and individual retirement accounts, as well as the beneficiary designation of the plan.  If you have a QDRO on your 401k, make sure you have a copy of that on file, too.
  6. Provide copies of any gift tax forms previously filed to your independent financial advisor.
  7. Provide copies of any important documents, particularly those relating to divorce, annulment, separation, adoption, or has who was won custody of the children. Don’t overlook these in ownership for real estate. If possible,  outline how you want the property to pass in each of the following situations: They predecease a spouse, a spouse predeceases them, one or more of your children predeceases you, you predecease the parent or other older relative who may not remain financially independent.
  8. Consider how you would respond to the following questions: In the event of you and your spouse die at the same time in a common accident, for example, at what ages would you want property to be available to your children without restriction? At this time, should the need arise, whom would you wish to be designated as guardians of your children? If your chosen guardian becomes unable to care for your children, who would you want to succeed them?
  9. List all charitable organizations, including schools and universities, you expect to mention in your estate plan, and tie up an amount of property you intend them to receive.
  10. Specifically list items of personal property you want particular individuals to have upon your death, if you predecease your spouse and what other dispositions you would make if your spouse predeceases you. Don’t underestimate the importance of this step, it can be a mistake to assume that people will simply work things through on their own. Often, it’s helpful to discuss openly with family members and close friends your desire for them to have of sentimental, as well as monetary, value.

This is just sample checklist you can use.  The main point is that you need to be organized and keep the right people informed of your decisions.

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