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Estate Planning

The Need for Estate Strategizing

At a person’s demise there are certain typical problems which, if not planned for, create a burden on those who are left behind.

Proper estate designing can eliminate or reduce these problems.

Financial Burdens

  • Estate settlement costs are too high: These costs consist primarily of probate fees and death taxes.
  • Probate fees: These are generally paid to the executor of the estate and the attorney who assists with the probate.
  • Death taxes: Estates that exceed certain amounts may be subject to both state and federal death taxes.
  • Estate assets are improperly arranged:
    • Liquidity: There are not enough liquid (cash type) assets to pay estate settlement costs.
    • Cash flow: There is not enough income to care for loved ones left behind, e.g., spouse and minor children.

Transfer of Assets

  • Estate assets may be subject to probate delays and expense.
  • Assets transferred to minors may be in cumbersome guardianship accounts until they attain age 18 (or 21 in some states) and are then distributed outright to the children. A court supervised guardianship may be required.
  • Additional death taxes may be paid because there was no pre-death planning.
  • Without planning, estate assets may not pass to the intended heirs.

Care of Minors

  • Guardians: Parents can nominate a guardian for their minor children in a will.
  • Asset management: If the wrong persons are chosen to manage the assets left for the minors, the assets may be lost or unnecessarily reduced.

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