Estate Planning

The process of planning the accmulation, conservation and distribution of an estae in the manner that most efficienty and effectively accomplishes your tax and nontax objectives. Controlled estate planning is a systematic process for uncovering problems and providing solutions. There are three principal beneficiaries of your estate other than your spouse; Children, Charity and IRS.

Foreign citizens, not U.S. residents do not receive the same estate tax benefits for U.S. citizens. Benefit of the marital deduction for tax free transfer of assets to a spouse who is not a U.S. citizen will be lost without proper planning.

Most people assume estate planning deals only with tax (death, gift, etc.) and only for the rich. Estate tax planning is only one facet of planning what happens to your estate and estate tax planning often is not just for the rich. While it is true that if your estate is less than $5,000,000 (individual) and $10,000,000 (joint) only estates above these amounts would be subject to estate tax, but only for the amount above the amount above the exemption. However, the subject of Death Taxes is far from dead and the $5,000,000 and $10,000,000 will expire December 31, 2012. 2001 the excluded amount was $675,000 per individual and there was no carry over for married couples.

Most estates will go through a process known as probate, even well-planned estates. Unfortunately there is no maximum time allowed for this process and probate has been known to last for years and the longer it lasts the more expensive it is. In Texas, an estate with assets above $50,000 may face porbate. [Probate: The action or process of proving before a competent judicial officer that a document offered for official recognition and registration as the last will and testament of a deceased person is genuine.] Distribution and settlement of property including a business cannot take place until this process is completed. During this time proberty must be maintained, survivors must be cared for and a business or businesses may or may not be allowed to continue

Basic areas of Estate Planning:

1. Lack of liquidity: Insufficient cash to pay administrative costs including costs of maintaining proberty, taxes,and other estate expenses.
2. Improper disposition of asses: When the wrong asset goes at the wrong time to the wrong person in teh wrong manner, teh results can be and often is a disaster.
3. Inflation & Risk: Many individuals fail to consider the impact of inflation as well as risk on assets left for family security. Assets that have provided suitable income may suffer fromlasck of poper management. 
4. Inadequate income orcapital at retirement, death or disability: Family/Survivor needs for food, clothing, shelther and schooling often wil exhaust estate liquidity funds. Principal necessary to maintain a family's lifestyle is often underestimated assumptions of long term growth, inflation ora hostof other variables.
5. Business Owners: Business planning is an absolute necessity consideration for death, disability or retirement. At death, depending on the structure of the business it may or may not be alowed to contineu during the process of probate and distribution. Even if properly structured, the busines may still fail when business continuation planning is not stabilized.
6. Excessive transfer cost: Many families will pay a severe and needless price for poor, ineffective or inactions of senior family members.
7. Special circumstances: Overlooking the importace of planning for the spouse or child(ren) who cannont, should not or does not want to handle, a family business or investment portfolio is a disaster in the making. Consideration must be allowed for a physically handicapped or emotionally or mentally troubled spouse or child.

Who needs estate planning? In Texas, a will is not enough when it comes to estate planning. A will only deals with the distribution of property, it cannot do everythign. Everyone who owns property has an estate plan even if they thingk they don't. But, do you need real estate planning?

Do You:

1. Have an estate exceeding current or future unified credit exemptions?
2. In Texas, have federal income tax brackets in excess of 15%?
3. Have children who are minors?
4. Emotionally or mentally troubled or physically handicapped children, spouse or other dependents?
5. Children, spouse or other dependents that have their own weath?
6. Dependents who can't, or don't want to handle money, securities, or a business?
7. Closely held business interest?
8. Property in more than one state?
9. Charitable objectives?
10. Collectibles?
11. Family members, children or spouse that is a non-resident alien, or resident alien?
12. Have property or other assets in a foreign country?