Congratulations! You have come to an important decision at this point in your life. So, what should you do?
Identify your goals. Why would you need an estate plan? Some common goals include: * Care for yourself during your life especially when incapacitated * Care for and protect your surviving spouse * Care for and protect your adult and minor children from bad influences * Pass on values and ideals to your children and grandchildren * Save money in the long term * If you are divorced, ensure your property does not end up with your ex-spouse You may have similar goals, more goals or fewer goals than those identified above. Now that you’ve identified your goals, what should you do? Discuss your goals with an estate planning attorney licensed in your state so that you can both design a plan that fits your needs. If you have a simple estate with assets of $50,000 or less, a Will Plan may be best for you. Keep in mind that a Will may not effectively cross state lines and you may have to execute another Will should you relocate to another state sometime in the future. Also, a Will guarantees that your estate will be probated and if you have property in more than one state, then a probate process will have to be initiated in every state in which you have your property or properties. Ideally, a Will Plan should have the following: * A Last Will and Testament * A HealthCare Advance Directive or HealthCare power of attorney * A Living Will * A HIPAA Authorization document * Durable Financial Power of Attorney (in Maryland, a statutory financial power of attorney) * Supplemental Durable Power of Attorney (if applicable) * Memorial Instructions (if desired) If you are a business owner, or you are a partner in a corporation, you own lots of assets or you are a highly skilled professional (doctor, lawyer, etc), you will be doing yourself a great disservice by having a simple Will Plan. This is because you have not taken into consideration issues like asset protection, properly utilizing your tax coupons, protecting the interests in your business, etc by utilizing advanced estate planning techniques that will not only protect you and save you lots of taxes, but will be of great benefit to your loved ones. Discuss advanced estate planning strategies with your estate planning attorney today. Contact us by clicking here. At the very minimum, if you are 18 or like most 18 year olds heading to college, you should have a simple basic estate plan such as the Will Plan in place so that your loved ones can step in to help and deal with any doctors, health professionals, etc should the need arise. So are you truly ready to plan? Don't put it off. Do it now. Do you know what makes up your estate? The list below may surprise you.
Planning your estate helps you take advantage of your tax coupons. It’s a “use it or lose it” deal. Example: If a married couple has a combined total of assets that is over $3M ($3.1M or more), your estate will pay16% Maryland taxes on anything over $3M. So, assuming your estate has $3M (factoring in your life insurance, real estate, retirement plans, etc), your spouse who should only be dealing with issues like funeral arrangements, properly grieving your passing, or comforting your children (if any), will not have to worry about paying the state of Maryland a whopping $80,000 in taxes for your half of the amount over $1M ($500,000). If you had properly planned your estate, that sum would have gone into a Qualified Terminable Interest Property (QTIP) Trust which your spouse can use without having to worry about payment of taxes. In this situation, no federal tax is due since the exemption amount is $5.49M. How about your child or children? Will they know what to do with a $1M dollar inheritance at 18, 20, 21, even 25? What if your child gets sued, has creditor problems, marries an “evil” spouse, has special needs, loves spending money unnecessarily, etc? What will happen to that inheritance? I will leave that to your imagination. Planning your estate enables you to create what I call beneficiary trusts. If properly drafted, this Trust can protect the spendthrift child from themselves, or protects your child against lawsuits, or a divorce, creditors, personal injury claims, etc. How about your IRAs? We all know that your IRAs are growing tax deferred right now until you reach the proper retirement age in the IRS code? What if you die before that age? Do you know you can prolong those tax deferrals for your children’s benefit? A properly planned estate will include a separate IRA Retirement Trust also known as a Stretch or Inherited IRA Trust. The longer your IRAs can grow tax deferred, the more money stays in your estate for your beneficiaries’ benefit. There is power in tax deferred investment. For example, $1 doubled every year for 20 years tax free (at an annual return of 12%) is $1,048,567. Conversely, $1 doubled every year for 20 years at a tax rate of 29% is $45,701. An IRA is treated as “inherited” if the individual for whose benefit the IRA is maintained acquired the IRA on account of the death of the original owner. . Under the IRS Code and Regulations, the IRA assets can be withdrawn based upon the life expectancy of the beneficiary. If you have $250,000 or more in your IRA, consider adding an IRA Retirement Trust to your estate plan. Estate planning is a lifetime process. Personal and legal changes may occur after you have planned your estate. Work closely with your estate planning attorney so that all documents in your estate plan works exactly the way you designed them. There is nothing worse than having an estate plan that fails. So, what are you waiting for? Contact an estate planning attorney today to get started. It’s all about peace of mind. Contact us today for more information on creating estate plans that are specifically designed for your needs. |
AuthorBiola Bakare is passionate about protecting you, your loved ones, and your assets through carefully crafted estate plans that gives you peace of mind. Attorney Bakare will also take care of your small business needs with the courtesy and attention you deserve. Call or contact us today for a free consultation. ArchivesCategories |
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From within Prince George’s County, our law firm represents estate planning clients from Laurel, Clarksville, Columbia, Elkridge, Ellicott City, Marriottsville, Upper Marlboro, Mitchellville, Bowie, Beltsville, Glenn Dale, College Park, Greenbelt, Silver Spring, Rockville, Potomac, Washington, D.C. and surrounding areas. The Maryland and Washington, D.C. Law Firm of Biola Bakare, LLC focuses on Maryland and Washington, D.C. comprehensive estate planning, wills, trusts, estates, probate administration, asset protection, children’s trust, credit shelter or family trust, special needs trust, beneficiary planning, incapacity planning, enhanced durable power of attorney, enhanced advance directive, business succession planning, and family limited partnerships. Attorney Biola Bakare offers comprehensive planning as a trust attorney, probate attorney, asset protection attorney, corporate attorney, and business law attorney. Licensed in Maryland, Washington, D.C., and New York. DISCLAIMER: This website is for informational purposes only. It is not to be construed as formal legal advice. Viewing the contents or exchanging emails with the Law Office of Biola Bakare, LLC does not create a business or professional relationship between the parties. No attorney/client relationship will be created with the Law Office of Biola Bakare, LLC without a formal, written legal services agreement. |