If you haven't done so already, today is the day to begin
planning your estate. Thinking ahead can save you many tax dollars,
and with estate tax rates as high as 45 percent, this should be of
primary importance to you. In addition, you want to control the
disposition of your property at death.
Below are some tips to help you make certain your estate is
properly planned.
1. Update Your Will or Living Trust
Your will or trust is the most important component of your estate
plan. It is the basis for distributing the majority of your assets.
Your will or trust should be updated every three to five years and
also after times of personal change, such as marriage, death,
divorce, birth, adoption, inheritance or a move to another state.
Remember that tax changes occur often and may alter the
effectiveness of your existing estate plan.
2. Choose an Executor or Trustee
Think long and hard about the individual or institution
named to act as your executor or trustee, bearing the
responsibility of carrying out your wishes after death. You will
want to name someone you trust implicitly, someone who is
experienced to act. You may consider naming a loved one along with
an experienced financial institution.
3. Name a Power of Attorney
Assign someone to act for you to handle your financial affairs in
the event that you are unable to do so yourself. Property can also
be managed, and disposition rights granted, through a durable power
of attorney.
4. Create a Living Will
Draft a living will that makes your wishes known regarding
extraordinary measures for keeping you alive. A living will allows
decisions to be made when you are unable to communicate your
wishes. This document can help family members who may be distraught
make decisions based upon your stated wishes. You should inform
your family members of your wishes in advance.
5. Check Up on Insurance
Evaluate your insurance periodically. Make sure that you have
enough to cover changing needs.
6. Watch Your Investments
Commit to learning more about investments. Your finances
are your future, and the more you learn, the easier and more
interesting it becomes.
7. Give a Gift
In addition to the estate tax exemption, which currently allows you
to have an estate worth up to $2 million without paying federal
estate taxes, you can lessen your estate taxes by taking advantage
of the $12,000 annual gift exclusion. This exclusion allows you to
give up to $12,000 to any number of individuals each year without
paying the gift becoming subject to gift tax. Spouses can combine
their annual exclusion and give $24,000 per year to any number of
individuals.
8. Be Charitable
An unlimited amount of money can be given to a qualified
charitable organization such as St. John's University during your
lifetime or at your death, free of federal gift and estate taxes.
Charitable gifts are an important component of any estate plan and
may be especially helpful for people who do not have heirs to
consider when distributing their estate.
Through gifts to a charitable organization, you can benefit
during life and at death—and reduce your taxable estate as well.
Just call us if you'd like more information.
For more information, contact Susan Damiani at (718) 990-7562,
or e-mail us at damianis@stjohns.edu