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Enjoy Giving Now!
Birthdays. Christmas. Showers. What do all three have in common? The ability for the giver of a gift to enjoy seeing the receiver's reaction and joy to the gift given to them and knowing what they just gave made someone else happy. What a feeling. It is true that it is better to give than to receive in that regard.
If your love language is gift-giving, look into giving your financial contributions and gifts NOW instead of after your death. Wills are great and so is making sure people and organizations get what you worked a lifetime for, but, there are opportunities for you to see your hard earned money bless others today.
There are two veryeasy ways to go about this. First, is to pay either medical or educational bills - unlimited expenses! Just make sure you give directly to the institution on behalf of the person you wish to help. That means college, doctors, hospitals, medication - expenses anyone would appreciate the help with! Second, is to give $13,000 per person per year. Yes! That means you can select as many people you would like to give each $13,000 a year to! Just remember that you do have a lifetime to give $1 million without paying taxes.
Changes to Estate Planning in 2013
At the end of 2012, people were worried that the fiscal cliff would bring a lot of tax increases to investments, income, and will see the end to unemployment benefits extensions for people who have been hit the hardest by the economic downturn. The reason that the issues have not been rectified is because the US states government has been running a deficit. A little talked about aspect of the fiscal cliff is the changes to estate tax and how that will affect estate planning in years to come.
Current estate taxes until the end of 2012 take 35 percent of the assets which are passed onto successors. That is after a limit of $5 million for individuals or $10 million for couples is met as the current exemption. If Republicans and Democrats are unable to agree to new measures, then that rate will increase up to 55 percent after the first million. Obama has proposed a tax of 45 percent and a middle ground of a $3.5 million exemption.
Estate Planning Needed at All Ages
Many people think that estate planning is just for old people, but that is not necessarily true. An article is Forbes magazine stated that there are way too many people of all ages and situations that not only do not have an estate plan, but they have not even drawn up the very basics for the documents.
A 2011 survey found that 64 percent of baby boomers do not have living wills. That is a document that anyone over the age of 18 should have. These documents allow a person in advance to decide on what type of care they will get if he or she will become ill and incapable of making his or her own decisions.
Even young and broke people should have a will.
In most states, parents do not have the authority to make health care decisions or manage the money of their children over the age of 18. If these young people were to get in a serious accident, his or her parents might have to go to court to get approval to make life or death or financial decisions on their child's behalf.
Estate Planning Checklist
Most Americans do not have a will, and especially not a revocable living trust. And yet, anyone that has had to deal with the estate of a deceased family member who did not have solid plans in place will tell you how frustrating, time consuming, and expensive it is to sort everything out.
If a person dies with no will or trust in place, the courts will follow state law to disperse the assets, regardless of verbal promises. If someone dies with only a will in place, the courts will have to give the document a stamp of approval before dividing up the estate. This is known as probate, and the cost of this necessary judicial step can cost more than 5 percent of the estate's value and can trap the heirs for a year or more in a legal twist to get the estate sorted out.
An easy way to avoid all that hassle that your family will have to go through by setting up the essential documents. That way, all of your assets will go exactly where you want quickly and with the least amount of expense.
What to Consider When Appointing a Trustee
Estate planning isn't easy, no matter what level of assets you have. It's important for every family to have a plan of what to do with assets upon death, no matter what level of income or the closeness of family relationships. A trustee is a person (or a member of a board) who is given control of powers of administration of property. This is usually a trusted family member or child. Hiring a competent estate-planning attorney is the most important step to planning your estate, but there are many factors to consider when appointing a trustee. The first, according to Probate & Property, a publication of the American Bar Association, is to consider the legal capacity of whomever you'd be interested in appointing as your trustee. It should go without saying that only competent adults can be appointed as trustee—a child cannot be appointed until he or she is of legal age. Laws vary slightly from state to state, especially if the trustee you're interested in appointing is a charitable organization or other financial institution. This is something to discuss with an Illinois estate-planning attorney.On a more personal level, according to Probate & Property, is to consider the specific personalities and skills of the individual who you're interested in appointing. These characteristics include "judgment, experience, impartiality, investment sophistication and track record, availability, accounting and record-keeping ability, and potential conflicts of interest." Appointing a trustee who understands capital gains is important, considering the recent Uniform Principal and Income Act, which "gives the trustee the ability to allocate some or all capital gains in a particular year to trust income." Family drama and relationships need to be taken into consideration as well—will one child create conflict for the other if he or she is named trustee (or not).
Some People Have No Will, Some Have Too Many
Some people still consider wills to be for the wealthy and rich, although there are many reasons to get a will made even if you are not a millionaire. On the flip side of that coin we have Thomas Kinkade, a millionaire, whose estate is being fought over, because he left more than one will. Forbes reported a story on this legal battle earlier this year.
Kinkade, who was a painter, died last April from an accidental overdose of alcohol and Valium. The 54-year-old was separated from his wife of 30 years, and he also had a new girlfriend, who he was living with. This is where the story gets interesting, because both the wife and the girlfriend have made claims for the estate.
Kinkade's girlfriend, Amy Pinto, has said she is entitled to the former family home in Monte Sereno, $10 million in cash, and some of the artist's work. To add fuel to the fire, Pinto was excluded from Kinkade's funeral because of the court battle, making the case all the more dramatic in court.
The New Trend of Spiritual Estate Planning
Estate planning allows people to arrange the distribution of their assets upon their death. In these situations, there are often many people clamoring for ways to hold on to their departed loved one. Rather than allow unclear desires cloud a legacy, estate planning intends to honor last wishes. It also attempts to avoid any taxes which could decrease the assets held for dispersal to loved ones.
There is a new trend in estate planning, which has been especially popular with baby boomers. It is termed "spiritual estate planning" because it is based on a system of values that the planner wants to leave behind. An example of enduring values is leaving money to charity, which is up almost 20% from last year. These statistics have been collected by Charity Navigator, who monitors charitable donations.
Another example of this kind of estate planning is about how people are leaving or not leaving estates to family members. This can include second or third families if sons or daughters have remarried numerous times. Some people can choose to leave their estate to one child while cutting another child out of the estate altogether.
Estate Tax Slated To Change in 2013
According to the American Association of Retired People (AARP), "Congress hasn't made estate planning any easier with its ping-pong approach to the estate tax," and the federal estate tax rates are slated to change again in 2013. Finding a qualified and competent attorney is the most important step to begin estate planning. Not only can a professional help you to ensure that your inheritors get the most of your estate, but also help you to wade through the necessary and complicated paperwork and legalese. In 2010, the federal estate tax rate was zero—and has moved upward since. The New Year marks a new rate, unless Congress decides otherwise. Now's a better time than ever to begin the process.
Consider it a holiday gift to yourself and your family. According to the AARP, "until January 1, 2013, the amount of your estate exempted from federal tax is $5 million for individuals, $10 million for couples." These numbers don't include gifts of up to $5 million that are exempt before paying a gift tax ($10 million for a couple).
Illinois Housing Market Lower than National Average
At the end of September in Illinois, almost eight percent of home mortgage loans were delinquent. The state remains one of the worst in the nation for foreclosures, according to the Mortgage Bankers Association.
The quarterly delinquency survey was one of three reports that were recently issued that show the housing market in Chicago and the surrounding areas continue to remain struggling to pick back up. Foreclosure proceedings were started against 1.29 percent of Illinois homes, along with the addition to delinquent loans, in the third quarter. The percentage of loans in the foreclosure process totaled about 6.83 percent. This percentage of loans in Illinois that entered the foreclosure process was higher than any other state in the country, with the exception of New Jersey and Florida.
Of all mortgage loans nationally, 7.64 percent of all one to four unit residential properties were delinquent by the end of September. For judicial states like Ilinois, in which court systems process foreclosure actions, the foreclosure rate decreased a little bit to 6.6 percent. The rate for nonjudicial states is only 2.4 percent.
Common Estate Planning Mistakes
According to On Wall Street, there are a lot of people that make mistakes when they are planning their estate issues. If you are willing to take some time, you can get the most out of your planning and you will be able to understand what will happen to your money when you pass away.
Not Making a Plan
One of the biggest problems with an estate is not making a plan on where your money is going to go after you pass away. The reason this is hard for most people is because they have to admit they are going to die someday. This can be uncomfortable.
Doing It Alone
There is nothing wrong with using legal forms you may have downloaded from the Internet, but you may not know what kind of amounts you should send where. This can be hard for you to do alone and the help of a lawyer is usually needed for this part.
Not Knowing
There are sometimes that you may think you know exactly what you want to do until you get a better deal in front of you. Getting a lawyer to help you with this will open opportunities to you that you may not have ever thought was there.
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