It’s one of the few things in life we can all count on happening, yet most of us are unprepared for death. I admit it’s not a very popular subject to talk about. However, when it comes to estate planning and leaving behind a legacy for loved ones, the concept of price verses cost plays a HUGE factor.
By spending the time and paying the price now, you can avoid thousands of dollars in estate administration costs, taxes, and stress to your loved ones in the future!
A couple of weeks ago we talked with attorney and honorary RichLife advisor, Jeff Zitron, about the basics of estate planning. We covered a few essential topics such as wills, the death tax, and blended families. We started with the #1 request I hear most from my clients:
1. “I want to create a lasting legacy for my family. How do I accomplish this?”
Jeff’s answer: “Everybody needs a will.” This is something a lot of people put off, and the cost of not doing something now can be devastating in the future, particularly where the custody of children are concerned.
A will gives you the power of authority to determine who inherits what, as well as who will be in charge of asset distribution. This can help to avoid family disputes and unnecessary tension. It also allows you to set up trusts for your kids or family members with special needs.
If the idea of doing this sounds overwhelming, Jeff reminds us, “You don’t have to go asset by asset. A will is an adaptable and durable thing.”
Meet with an attorney, and spend an hour getting the basics in place. Then as life happens – marriage, divorce, blended families – you can make adjustments. The important thing is not to procrastinate because without a will in place, nothing is certain.
2. “I am expecting to inherit $300,000. What do I need to know about the death tax?”
As of now, only monetary gifts in excess of 5 million dollars are federally taxable. In other words, you’ve got a long way to go before you have to worry about paying any taxes on your inheritance! There is a proposal out there, however, that may change this.
If congress does not act again before the end of 2012, the federal benchmark for taxable estates will decrease from 5 to 1 million dollars.
One million dollars isn’t what it used to be, folks. Changing the taxable threshold from 5 million to 1 million is a political hot potato right now that could potentially impact a lot of people. This is something to be aware of when planning for your RichLife Legacy.
3. I recently remarried. How do I insure my money gets passed on to my children, and not my spouse’s children from a previous marriage?
Blended families add a whole new level of complexity to will drafting, but it’s certainly not insurmountable. A good rule of thumb to follow:
As soon as you say, “I do” for a second or third time, remember to re-do the will!
In most states, the spouse by default will inherit the estate of the deceased. If not otherwise stated in your will, those benefits would then be transferred to your spouse’s children, excluding any children you might have from a previous marriage.
If you want to do right by your loved ones, make sure to re-do when you I-do, so everybody gets taken care of.
Take the time to do this now, and you will have the peace of mind that comes from knowing your loved ones are taken care of, and assets are divided according to your best intentions. This is a small price to pay when you consider the priceless benefit of lasting peace.
Life happens . . . and so does death. Are you prepared?
What does paying the price now look like in your life? What real life challenges have you faced lately? Share your story , inspire others, and see what comes back to you. Here’s to making your RichLife a reality! http://www.richlifeadvisors.com