Writer / Mary Wisehart Phillips
Are you making the same retirement mistake that 64 percent of Americans are making who have children under the age of 18 years? Or that 58 percent of Americans are making who are under the age of 52? Or the 40 percent who are under 71 years of age? Retirement planning goes beyond what you are saving or not saving.
You are, if you have not prepared a last will and testament or a trust, according to a survey by Care.com. Don’t leave your loved ones with the unnecessary burden and heartache in an already difficult time.
Common excuses are:
1. Believing that you don’t have enough asset
2. Just not getting around to it
3. Thinking estate planning is too costly
4. Simply not wanting to contemplate our own mortality
For those with children under the age of 18, a guardian can be appointed for your minor child or children to ensure they are properly cared for by the person of your choice. A trust, through your will, can be established for their care and maintenance until you feel they will be able to manage their own assets.
For those who do not have children or have adult children, who you feel can manage their own finances, you are able to distribute your assets as you wish.
These choices can be made through a last will and testament or a trust. The cost for a last will and testament, in most cases, is $300 to $400, and can be completed in about 10 days.
Probate has received a bad reputation in the media, but Indiana’s process is relatively quick and simple. It is designed to prevent fraud against a decedent’s estate. Opening up an estate takes only a few days. Some assets can be transferred immediately. Debts can be paid right away, and the process can be completed in just three months.
Trusts generally cost more, depending on your needs. There are revocable trusts, which offer flexibility to manage assets during your lifetime and irrevocable trusts, which offer less flexibility but can provide other benefits. Funding a trust is an important aspect that is sometimes overlooked and should be done early in the process and reviewed periodically, particularly when assets or events change.
An estate-planning attorney can assist you in lowering the tax consequences in a number of ways, including death transfers that occur outside your estate, such as joint tenancy, beneficiary designations and transfer on death designations.
Currently, Indiana has no inheritance tax for assets transferred to a spouse or a charitable organization and a child, stepchild, parent, grandchild, grandparent or child-in-law $250,000 is exempt for each beneficiary with no limit on the number of beneficiaries. The Federal Estate Tax is $0 for transfers to a spouse or charitable organization and $5,450,000 is exempt for an individual or 10,900,000 for a couple.
An estate-planning attorney can advise you on whether it is wise to gift assets during your lifetime or take advantage of Indiana’s “stepped up basis” on death transfers of appreciating assets, which can save your beneficiary capital gains tax.
A little planning with a knowledgeable attorney can save your loved ones distress, time and money. Prepare a last will today with Nice Law Firm.