Frequently Asked Questions
Why Do I Need Estate Planning?
What Does An Estate Plan Include?
What Are Estate Taxes?
What is an Inheritance Tax?
What Are Gift Taxes?
What Will Happen to my Children if I Die Without a Will?
How Much Does Estate Planning Cost?
How Can I Protect My Pets?
Do I Need An Attorney?
Why Do I Need Estate Planning?
Estate planning is the process with three primary objectives:
• To ensure that your property and assets will pass to the people you designate
• To eliminate or reduce the tax burden on your estate
• To provide for your children and other beneficiaries you designate
Estate planning allows you to ensure that your assets and property will be given to the people you choose. An estate plan can avoid the lengthy and costly probate process by arranging your assets to pass onto someone else at the time of your death. Avoiding probate can be done by passing an asset through a joint tenancy, life estate, living trust or beneficiary designation.
What Does An Estate Plan Include?
A proper estate plan should be designed to minimize the estate tax burden, avoid probate, appoint someone to act on your behalf if you become disabled and name a guardian for your children. At minimum, your plan should include the following:
• A Last Will and Testament
• A durable power of attorney
• A healthcare proxy or medical power of attorney
Estate taxes may be imposed when property or assets of the decedent are transferred to a beneficiary through the deceased person’s will. It does not apply to assets transferred to a surviving spouse because of the unlimited marital deduction.
An inheritance tax is a state tax that is paid by the recipient of a deceased person’s property. The rate depends upon who inherits the property. The states that impose an inheritance include but are not limited to the following: Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania, Tennessee and the District of Columbia.
The gift tax is triggered when a donor transfers money or assets to another person. The federal government sets the annual gift tax exclusion, which is the amount of money you can give to someone else without triggering the tax. In addition to the annual exclusion, you can give the following items without triggering the gift tax:
• Gifts to your spouse
• Gifts to qualifying charitable organizations
• Gifts to a political organization for their use
• Tuition or medical expenses paid for someone else
What Will Happen to my Children if I Die Without a Will?
If the parents of a minor child are deceased, a judge will appoint a legal guardian. If you want to have a say in who your children will with live with after your death, you must put that choice in writing and include such a provision in a properly executed will.
How Much Does Estate Planning Cost?
The cost of estate planning can vary widely depending upon your needs, the size of your estate and the number of beneficiaries you have. It will largely depend upon your estate planning goals and objectives. The Law Office of Michael H. Fienman is committed to providing affordable estate planning services.
Although pet owners consider them to be part of the family, the law considers pets to be property. Most people want to make sure their pets are provided for after they die. Pets cannot adequately be protected by a will because wills are not enacted immediately. The best way to protect your beloved pet is to set up a pet trust. A pet trust is valid during the owner’s life and after his or her death. Currently 40 states recognize pet trusts, including New Jersey and Pennsylvania.
Estate planning is an extremely important and serious business. A simple mistake can change the entire outcome of your will or trust if executed improperly. Each state has very specific laws about what can and cannot be included in a will, a power of attorney and a trust. State laws also dictate who is allowed to be a witness and the executor of your estate. Trying to save money on an estate plan by doing it yourself is not a wise choice and may result in your relatives and loved ones spending thousands of dollars to fix your mistakes after the fact.