Estate Planning Basics

Ken Dolan: Hi, everybody. We’re glad you join us. Now, listen we don’t want to make lawyers rich and we don’t want to do any hifaluting stuff. Daria Dolan: And we want to talk about a topic that all of us generally speaking refused to discuss, address or own up to and that is death. Eventually, contrary to what a medical community is trying to accomplish. Ken Dolan: Eventually. Daria Dolan: We’re all going to kick off. Ken Dolan: And especially difficult to talk to our parents, to talk to the older generation, and senior citizens about these kinds of things because we’re still kids, however, while we’re living. Daria Dolan: In your opinion we’re still kids. Ken Dolan: Well, that’s right. While we’re living it’s so important. Did you take some basic estate planning steps? We’re going to talk about some basic estate planning steps to make sure what you work so hard for goes to the people you love with a minimum of legal and financial confusion. Legal, a minimum of the expense and very little hopefully arguing among how many times did we have calls on radio or in television? Brothers and sisters are arguing, cousins are arguing over money. It’s so important that while you are healthy that you do some estate planning things because death undeniable and incapacitation can happen. We are not able to manage. Daria Dolan: And the other part of this is, they’re your assets so how ever you want them to be disbursed you should do it, but minimize the problems right from the beginning while you’re still alive and can do something about it. Sit down with your heirs and tell them what you’re doing, and why you’re doing it. If there is one child who is going to be reduced to basically nothing because of past problems and such. Ken Dolan: You know. Daria Dolan: Let them know because they will come back and haunt your other children when the time is over and done with. Ken Dolan: Also special needs child. There could be a special needs child. Daria Dolan: Exactly, you want the well children to understand why you’re setting up a trust for that. The other thing is do we do wills or trusts. Trust for the most part even though they have simplified the will process in both states now. Ken Dolan: To many states, yes. Daria Dolan: That unless you’ve got serious assets or serious problem that you’re trying nip in the bud, a will from most many people will suffice nowadays with the minimum of trouble. However, there are the cases in states where there are still a lot of rigamarole because the legal profession is so strong with the legislature, or there are situations where you definitely figure whatever you do is going to create one of your kids or one of your heirs to create a plight than trust become the much preferred document because it is where that what is written in the trust is overturned by a court. Ken Dolan: And also a trust generally speaking will avoid probate number one as Daria says because of the detail of their heart have taken generally more detail on a trust than a will is harder to fight, and obviously if something very, very important. If you become incapacitated any assets mentioned in your will aren’t going to be very good without a petition to the court, so it allows you to show what happens. If you become incapacitated somebody can take your assets and take care of yourself. Daria Dolan: For your directive because it will say in the trust document what they should do and shouldn’t do with your funds when you’re incapacitated. Ken Dolan: Speaking of directives you may want to consider some medical directives such as living will, health care proxy, a power of attorney for health care which ensures that your wishes are taken care of when you may not be able to make them yourself. Also the durable power of attorney authorizes somebody else to act in your in stead if you are unable to. Daria Dolan: And that really would work for someone that really doesn’t need the added expense and complications of a trust, but once to be sure that they are taken care or should they become incapacitated. And the unfortunate fact of life is today more people become that incapacitated then die in any given calendar year, and then that’s where the problems begin. Who is going to pay the bills, who is going to watch over the incapacitated person? Ken Dolan: Two things to be taken care of also to talk with an estate planning attorney is gifting. This year you are allowed to give $12,000.00 worth of assets in the year 2008, $12,000.00 worth of assets to anybody you wish for, for any reason that would be $24,000.00 for a husband or wife. Daria Dolan: To one person but that doesn’t mean to include giving to 10 people $12,000.00. Ken Dolan: That’s right. I guess if you want to make your estate lower for tax for at least, and last but no the least from the stock standpoint and from an asset standpoint don’t forget when you give somebody during your lifetime an asset they get to that your cash basis. However, it whether stock or real estate if they inherited talk with an estate planning attorney. Daria Dolan: Through that will or trust. Ken Dolan: If you’re talking in a step up cost basis on the date of death there’s some option on that, but generally that’s what it is. There are so many things you can do with the estate planning while you’re alive. It doesn’t make sense not to protect what you worked so hard for. I should yell with everybody. Daria Dolan: No, you’re not yelling. Ken Dolan: We get so many questions of people, “I don’t know what to do. My parents died. There was no will. Now, the estate going to make the will. We are all arguing.” Do it now. Daria Dolan: And please widows because you are the biggest defenders of this. Well, there are some widowers out there as well that I’m sure break this rule. Don’t assume you can get off without having to do either a will or a trust by just putting your kid’s names on every thing you own. That is in other and complete disaster not only during your life should one of them run into bankruptcy problems or be sued or lost a business so what have you? But also when your debt because now you have given them for sure your cost basis and if they want to sell to realize their profit they’re going to pay much larger tax on it than they would not have their inherited. Ken Dolan: While you are alive estate planning, talk with a good attorney. Daria Dolan: Please.