You may not think of life insurance and estate taxes together, but having the right life insurance policy can be the difference in helping your heirs enjoy their inheritance.
Right now, the federal estate tax exemption is set at $5 million. If you give away more than this amount, your estate will be taxed at 35 percent. So if you give away exactly $5 million, your heirs will be faced with a $1.75 million tax bill right off the bat.
You may want to give away some of your assets while living as a gift, instead of bequeathing everything at death. In this way, you can see the fruits of your generosity as your family and loved ones use the gifts to their benefit. However, the line between gift or inheritance can be thin, and if you are not careful while giving gifts, you may shortchange another person’s inheritance.
In New York, you can make a gift while living to satisfy a provision in your will. This is called an “advancement” and acts as an anticipatory distribution of your estate — basically your estate is distributed before you die. However, to make an advancement, you must explicitly state so, otherwise your will may be honored as written, in addition to the gift made.
Writing a will is not that difficult. But there are requirements you need to follow to write a valid will. If you fail to meet these requirements, your will may be challenged, setting up a nasty will contest that could tear apart your friends and family.
Of course planning for your whole estate to be distributed after you death can be complicated. However, when it comes down to it, a will has some pretty easy to understand requirements for it to be considered enforceable by the court.
Here are the three main New York will requirements:
You don’t need to be a billionaire to provide for your children after your death. More and more people are accumulating enough assets to leave something for their loved ones. But leaving everything to your kids may not always be the smartest decision — think Paris Hilton.
However, there are ways for parents to provide for their loved ones without having to worry about their children blowing the money on cars and champagne. One common way is setting up a trust fund. The following are four tips from The Fiscal Times for setting up a trust fund to provide for your loved ones while also ensuring they do not waste their windfall:
Now you can spend forever on the web, so long as you spend $50 a year from here to eternity. Being buried in an online cemetery is the newest craze, with entrepreneurs offering virtual tombs and cyber-cemeteries for those who can't ever disconnect.
For an annual fee, individuals can set up their own tombs or tombs for their loved ones, reports the New York Post. Friends and family can simply go online in their living rooms and pay their respects, place flowers, or leave personal messages for the dead. In addition, subscribers can also use the virtual cemeteries to store wills and instructions for their funerals.
Arturo Gatti died under mysterious circumstances with his wife’s purse strap wrapped around his neck in a Brazilian hotel room. His wife was immediately fingered in the death, though the death was later ruled a suicide.
Now, Gatti’s wife Amanda Rodrigues has a will signed shortly before his death leaving her all of Gatti’s fortune. But Gatti’s family is saying “not so fast,” claiming that an earlier will that included the boxer’s family was in fact the true representation of his wishes, setting up an Arturo Gatti inheritance battle.
Prior to his death, the battles Gatti were best known for were his three epic fights against Mickey Ward. Known for his punishing, bloody, and highly entertaining style, Gatti earned a small fortune in his fights.
Getting started with estate planning is understandably difficult. After all, one is forced to confront one's own mortality. But beyond thinking about life and death, and pondering "what is the meaning to it all?" estate planning can be difficult because frankly, people don't know what anestate plan is, or the estate planning basics.
Try talking about a legal matter with any of your friends. Their eyes will glaze over. Estate planning is a legal matter, and it's boring and depressing. So people don't think about it or put it off.
But if you understand how simple an estate plan is, and the importance of it, you may think differently.
Every parent would like to believe their children are angels. But the fact of the matter is that your kids may be “bad” with money, can’ t be trusted, or be a downright crook. Regardless, you love your children and want to provide for them.
So how do you ensure that your inheritance for children is not squandered?
This question was recently raised in The New York Times and the author suggested two ways — both utilizing a trust. First, parents can set up a trust that restricts how much money their children will receive. Basically, this prevents children from wasting all of their inheritance in one giant orgy of spending. Second, parents can set up goal-oriented trusts where money is only released if certain milestones are met.
We've previously written about doing estate planning early and writing a will even if you're only 30. But a lot can happen in your life between the ages of 30 and 80 (the average life expectancy in the U.S.), and the will you wrote when you were single and 30, may not make sense when you're a grandparent and 80.
Here are six of the top reasons for changing your will:
When you remarry, one of the last things you may think about is estate planning for second marriages or protecting inheritance of your children. However, without proper estate planning, a second marriage could be devastating to the children from of your first marriage.
Oftentimes, married couples sign reciprocal wills where the spouses agree to give all of their assets to the surviving spouse in the event of death, reports NJ.com. So, if a husband dies, all of his assets will pass to the wife and vice versa. Then, when the other spouse dies, the children from that marriage will inherit their share.
