Wade Law Blog

Estate Planning Resolutions

Jan 20, 2011| BY: Wade Law Offices

On December 17, 2010 President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “2010 Tax Relief Act”). This means that the uncertainty surrounding the estate tax is over for at least the next two years. With the 2010 Tax Relief Act in place and a new year ahead of us, right now is a great time to take the following steps to ensure that your estate planning is complete:

Determine your net worth. Determining your net worth is not only important from a tax standpoint, but it will also ensure that you have property planned for all of your assets during the estate planning process.

Make or update your beneficiary designations. When you die, beneficiary designations control how assets such as life insurance, annuities and retirement accounts will be distributed. You should review the primary and contingent beneficiaries you have listed for each of your assets to make sure that the person(s) you have designated as the beneficiary is still the one that you want to inherit that particular asset.

Create or update your will or living trust. If you are a California resident and do not have a last will and testament or living trust, the state of California will decide how your assets are distributed when you die. By creating a will or living trust you get to determine who will inherit your assets. If you have minor children, a will is also important for appointing guardians for your children.

Plan for the new estate tax. The 2010 Tax Relief Act establishes a new estate tax rate of 35 percent with an exemption of $5 million per individual for the next two years. In addition, the gift tax exemption has also been increased to $5 million which creates some outstanding wealth transfer opportunities. If you already have an estate plan in place and it hasn’t been reviewed recently, you should have it reviewed to ensure that it reflects your wishes and is up to date with the new legislation.

Make sure that your assets are titled properly. People often fail to properly title their assets after they establish a living trust. If you have created a living trust, the assets must be titled in the name of the trust or you will not realize the benefits the trust was set up to provide to you and your heirs.

Create a financial power of attorney. When you create a financial power of attorney you give someone power to handle your financial affairs in case you are unable to do it yourself. Without a financial power of attorney, your family could have to go to court to receive permission to deal with your assets.

Create an advanced health care directive. An advanced health care directive allows you to appoint someone to make health care decisions for you if you cannot make them for yourself.

Make gifts while you are living. Individuals can still make gifts of $13,000 per year and couples can make gifts of $26,000 per year to anyone they wish. As long as the money goes directly to the educational facility or medical provider, you can also pay for college or private school tuition and even medical expenses.

Wade Law Offices is an Estate Planning, Business Planning and Asset Protection law firm with offices in Roseville, California and Newport Beach, California. If you or someone you know needs assistance with estate planning, please contact us at (916) 220-7147 to schedule a free consultation.

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