Gifting and Tax Strategies

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It is important to evaluate the effects of federal and estate taxes on estate planning. An estate may be subject to taxes before it is distributed to beneficiaries.

A specified portion of an estate is exempt from estate taxes. During 2012, the first $5,120,000 of an estate can be distributed to children or other heirs tax-free. The top federal estate tax rate on the taxable portion of an estate is 35% in 2012.

While most gifts or estates are not …

Prepare Your Estate Plan Case Study 5

Contents


Case Study 5 – How much will each heir inherit?

Description

George, a 98 year-old widower, has two children, Alice and …

Gifts and Unlimited Marital Deduction

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A gift is a tax-free distribution of funds from one person to another. The 2013 Internal Revenue Service code allows you to give cash and/or property valued up to $14,000 to each of an unlimited number of recipients per year without tax consequences. A married couple can give up to $28,000 per year, per recipient.

Gifts made to recipients over time can help reduce a large estate, and the gifts are tax-free to recipients. The unlimited marital deduction permits gifts …

Prepare Your Estate Plan Case Study 4

Contents


Case Study 4 – The surviving spouse’s share

Description

Sarah and Joe have three children. Joe worries that his wife, Sarah, seemed too …

Will Kits and Forms

A will is not a good do-it-yourself project. The cost of working around a minor mistake in a will can far exceed the cost of having a will properly prepared by an attorney.

Nevertheless, will kits and forms are widely available on the Internet, in bookstores, office supply stores, and other places. People can be attracted to these products by their apparent simplicity and low cost, but it’s important to use them with caution. Always have an attorney review any …

Prepare Your Estate Plan Case Studies

Prepare Your Estate Plan Case Studies

Do you have concerns about property-distribution issues? Discuss these particular situations with your adult children, trusted friends, or parent/guardian. Each case study includes a quiz. The correct responses are provided for each case for residents of Idaho, Iowa, Kentucky, North Dakota, and South Dakota.

Case Study 3 – The disadvantages of writing your own will

Case Study 4 – The surviving spouse’s share

Case Study 5 – How much will each heir inherit?

Case

Types of Wills

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There are several types of wills:

Attested wills are the most common type of wills. An attested will is usually prepared by a lawyer in typewritten form and signed in front of several witnesses who have no benefit in the will. All of the witnesses must sign it in front of one another and in front of the person making the will. The will-maker must also sign it in front of all of the witnesses. All of the previously mentioned …

Prepare Your Estate Plan: Print this Lesson

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1. Prepare Your Estate Plan — Introduction

How will your assets be distributed upon your death? Have you prepared for the distribution of your estate for the loved ones you will leave behind? Perhaps you have …

Types of Trusts

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Each of the various types of trusts available has particular advantages. An estate attorney can advise you about the type of trust that is most appropriate for you and your family situation. The testamentary trust and living trust will be discussed here.

A testamentary trust is a legal instrument contained in the will that sets up the management of assets for one or more beneficiaries following the death of the person creating the trust (grantor). This type of trust is …

Steps in the Probate Process

Steps in the probate process include:

  • Petition for probate of the will or administration of the estate
  • Appointment of a personal representative
  • Notice to creditors
  • Assembly, inventory, and appraisal of property
  • Classification and payment of demands against the estate (such as debts of the decedent and liens against his or her property)
  • Determination of homestead rights and family allowances
  • Management (and sale, if necessary) of property
  • Payment of state and federal taxes
  • Accounting to the court and distribution of property