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Estate Planning, 5E

Book Description

Anyone with assets and heirs needs a will to determine what will happen to their property and plan for the welfare of their children should they pass away unexpectedly. As people age, they tend to think more seriously about having a will and planning their estates, to make it easier for their heirs, and to give them the maximum amount of money possible. Idiot's Guides: Estate Planning, Fifth Edition makes it easy to understand all the issues surrounding estates. In it, you get:

- An introduction to the important concepts of estate planning and how to get started on a plan.
- Valuing your property and assets and how you own it, including businesses and self-employment issues.
- Getting the most from life insurance, pensions, and retirement savings.
- Creating a will and trusts, and learning how probate works.
- Looking after minor children in the event of your death, planning for special situations such as divorce and bankruptcy, and avoiding family feuds over inheritance.
- Everything you need to know about taxes: estate, gift, state and federal income--and how to ensure that your heirs get the assets you have intended for them.
- Planning for retirement, including Social Security benefits, power of attorney, and health care directives.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright Page
  4. Introduction
  5. Part 1: Understanding Your Assets
    1. 1 Introduction to Estate Planning
      1. What Is an Estate?
        1. Your Assets
        2. Your Estate Plan
        3. Your Will
      2. Why Many Don’t Plan
      3. The Importance of Looking Ahead
        1. Putting It All Together
        2. What Should Your Goals Be?
      4. Starting Now
      5. Putting Together Your Estate Planning Team
    2. 2 Property Ownership
      1. Taking Inventory
        1. Estate Planning Information Sheet
        2. Types of Ownership
      2. Real, Tangible, and Intangible Property
      3. Condominiums, Cooperatives, and Timeshares
        1. Condos
        2. Co-Ops
        3. Timeshares
      4. Storing Important Paperwork
    3. 3 Marriage and Property
      1. Joint Ownership with Right of Survivorship
      2. Tenancy by the Entirety
      3. Community Property
        1. What About Separate Property?
        2. Does Community Property Last Forever?
      4. Prenuptial Agreements
    4. 4 Life Insurance
      1. What Life Insurance Can Do for You
        1. Build Wealth
        2. Provide Ready Cash
        3. Tax-Free Proceeds
        4. Business Plans
        5. Savings
      2. Which Policy Is Best for You?
        1. Term Policies
        2. Cash Value Policies
      3. How Much Coverage You Need
      4. Who Owns the Policy? Who Is the Beneficiary?
      5. Easy Go the Taxes
      6. Who Should Not Carry Insurance?
    5. 5 Company Pensions
      1. Qualified Pension Plans
        1. Defined Benefit Pension Plan
        2. Defined Contribution Pension Plan
        3. Profit Sharing Plan
        4. Stock Bonus Plan
      2. Vesting Requirements
      3. Distribution Requirements
      4. 40l(k)s, IRAs, and Other Ways to Save
        1. 40l(k)s and SIMPLEs
        2. 403(b)s
        3. IRAs and Roth IRAs
        4. Keogh Plans
      5. Is There an Annuity in Your Future?
      6. Building Wealth at the IRS’s Expense
      7. Early Withdrawals from Your Pension Plan
      8. Will Your Pension Be There When You Need It?
    6. 6 Strategies for the Self-Employed
      1. Sole Proprietor
      2. Partnerships
        1. When Partnerships Break Up
        2. Limited Partnerships
      3. Corporations
      4. Limited Liability Companies
      5. Comparison of Business Entities
      6. Even More Tax Talk
        1. S or C Corporation
        2. Tax-Free Formation
        3. Reporting to Uncle Sam
      7. Why a Buy-Sell Agreement Is Vital
      8. Time for a Change?
      9. Treating Yourself Well as the Key Employee
      10. When You Want to Sell
      11. Taking a Broad View
  6. Part 2: Wills, Trusts, and Probate
    1. 7 Problems with Dying Without a Will
      1. Dying Intestate
      2. Probate
      3. How the State Determines Your Heirs
      4. The Importance of Specifying Guardians
      5. The Administrator of an Estate
      6. Divorce, Remarriage, and No Will
      7. Adopted Children
      8. Children Born Out of Wedlock
    2. 8 The Basic Will
      1. Defining Your Legal Residence
      2. The Simple Will
        1. Introduction
        2. I. Identification, Definitions, Comments
        3. II. Debts, Expenses, Encumbrances, Taxes
        4. III. Specific Devises
        5. IV. Residuary Estate
        6. V. Personal Representative
        7. VI. Miscellaneous
        8. Self-Proving Provision
      3. Distributing Your Worldly Goods
        1. Will Worksheet
        2. Who Gets What
        3. How They Get It: The Specific Devise
        4. When Beneficiaries Die Before You
        5. When You No Longer Own What You’ve Willed
        6. How They Get It: The Residuary Devise
      4. What About Pets?
    3. 9 Trusts and Wills
      1. What Is a Trust?
        1. What a Trust Offers That a Will Does Not
        2. Who Should Have a Trust?
        3. Who Does Not Need a Trust
        4. Trust Terminology
      2. The Testamentary Trust
      3. The Living Trust
        1. The Revocable Living Trust
        2. The Irrevocable Living Trust
        3. Funding a Living Trust
      4. How a Trust Can Simplify Your Life at Retirement
      5. Downside to a Living Trust
      6. How to Select the Right Trustee
      7. Trust and/or Will?
    4. 10 All About Probate
      1. Probate Court
      2. Is Probate Really That Formidable?
        1. Probate, Step by Step
        2. Types of Probate Administration
      3. Executor Duties
      4. Selecting an Executor
      5. Probate Costs
      6. How to Avoid Probate
    5. 11 Unique Probate Situations
      1. Love and Marriage(s)
        1. Multiple Spouses
        2. Annulments
        3. Oral Arrangements
      2. Children from Artificial Insemination
      3. Simultaneous Death
      4. Advances Against Inheritance
      5. Abandoned Spouses and Adultery
      6. Murder and Profit
      7. Digital Assets
      8. Addressing Potential Problems Before They Come Up
  7. Part 3: Beneficiaries
    1. 12 Looking After Your Minor Children
      1. Protecting Your Minors
      2. The Guardian’s Duties
        1. How to Select a Guardian
        2. Age
        3. Marital Status
        4. Lifestyle and Child-Rearing Skills
        5. Compatibility
        6. Family Relationships
        7. Favoritism
        8. Money Management
      3. The Trust Alternative
      4. Giving Your Kids Cash Gifts Now (Sort Of)
        1. In Custody
        2. In Trusts
      5. Your Child and Your Estate: Entitlements
    2. 13 Marriage and Divorce
      1. Before You Get Married
      2. Now You Are Married
        1. Electing Against Your Spouse’s Will
        2. Augmenting an Estate
      3. The Prenuptial Agreement
        1. Prenup Specifics
        2. Avoiding a Challenge to a Prenup
      4. The American Way of Divorce
        1. Property Division
        2. Child Custody and Support
        3. Income and Some Other Tax Consequences
        4. Gift Taxes and Income Taxes
    3. 14 Planning for Special Situations
      1. Planning for the Disabled Child
        1. Your Disabled Child’s Assets
        2. A Trust May Be the Answer
      2. Living Together/Planning Together
        1. Unmarried Partners’ Legal Rights
        2. Your Assets
      3. Custodial Grandparents
      4. Handling Sudden Wealth
      5. About Bankruptcy
      6. Special Considerations for Professionals
        1. Choice of Business Form
        2. Disability, Retirement, Divorce, and Death
      7. Special Considerations for Farmers
    4. 15 Avoiding Feuds Over Your Estate
      1. Challenging a Will
        1. Incompetence
        2. Undue Influence
        3. Poor Execution
        4. Witnesses, but Not Beneficiaries
        5. “Messing Up” a Will
      2. The Don’ts People Often Do
        1. Making Abusive Remarks
        2. Making an Omission Without Explanation
        3. Making Promises
        4. Making Codicils That Change Beneficiaries
        5. Making a Joint Will
        6. Making a Separate List of “Gifts”
        7. Making Changes on the Will
  8. Part 4: Taxes
    1. 16 Federal Estate Taxes
      1. The Federal Estate Tax: $5,450,000 Estates
        1. Managing Your Wealth to Avoid the Tax
        2. What’s Included?
      2. Another Important Figure: $14,000
      3. The Gross Estate
      4. Tax Deductions Allowed
        1. Charitable Deductions
        2. The Marital Deduction
        3. The QTIP and Credit Shelter Trust
        4. Deductible Expenses
        5. Adding It Up
      5. 40 Percent Beginning Rate
      6. Taxing Each Generation
    2. 17 Gifts and Gift Taxes
      1. How to Present a Gift
      2. The Federal Gift Tax
      3. When You Aren’t Taxed
        1. The $14,000 Gift Tax Exemption
        2. Other Nontaxed Gifts
        3. Tax-Free Gifts to a Spouse
      4. A Variety of Gifts
        1. Outright Transfers
        2. Below-Market Rate Loans
        3. When the Revocable Trust Works Best
        4. Co-Ownership: Togetherness and Taxes
      5. Prior Gifts and the Unified Credit
      6. Estate and Gift Taxes Go Hand in Hand
      7. Gift-Giving from the IRS Perspective
      8. Deferring Gifts for Minor Children
    3. 18 Saving Money with Charitable Donations
      1. Tax Savings and Philanthropy
      2. Which Assets to Give
      3. Getting Your Donations in Order
      4. More Ways to Donate
        1. The Charitable Annuity
        2. Charitable Remainder Trusts
        3. Charitable Lead Trusts
        4. Pooled Income Funds
        5. Other Charitable Gifts
      5. Retirement and Beyond
    4. 19 State Taxes
      1. State Taxes on Inheritance and Estates
      2. Where Is Your Legal Residence?
      3. State Death Taxes
        1. Estate Tax
        2. Estate Tax Based on the Federal State Death Tax Credit
        3. Inheritance and Additional Tax Based on the Federal State Death Tax Credit
      4. State Gift Taxes
      5. State Income Taxes
      6. Your Retirement Residence
        1. Other State Taxes to Consider
        2. Social Security
        3. Intangibles
    5. 20 Income Taxes and Tax-Saving Tips
      1. Your Dependents
      2. Divorce and the Dollar
      3. Taxpayers’ Biggest Mistakes
      4. Exclusions and Deductions Worth a Look
        1. Business Deductions
        2. The Home Office
        3. Limits on Itemizing
      5. Estate Tax Savings
      6. Savings by Your Executor
        1. Timing Income
        2. Timing Estate Distribution
        3. No, Thank You
    6. 21 Keeping Your Wealth Within the Family
      1. Charity Begins at Home
      2. Giving Something—and Keeping It
        1. Trusts
        2. Considering Co-Ownership
      3. Life Insurance
      4. Loans Within the Family
      5. Your Family as Buyers
      6. Gifts to Minors
      7. Splitting It with Your Spouse
      8. Your Business for Your Benefit
        1. Transferring Company Stock
        2. Buy-Sell Agreements
        3. Employing Your Kids
      9. For the Very Wealthy
  9. Part 5: Retirement, Elder Issues, and More
    1. 22 Social Security and Other Retirement Benefits
      1. Social Security
        1. Fully Versus Currently Insured
        2. Tallying Your Benefits
        3. Designating Another Beneficiary
        4. Social Security Taxes
        5. Will Social Security Be There for You?
      2. Medicare
        1. Medicare Coverage
        2. Medigap
        3. Will Medicare Be There for You?
      3. Long-Term-Care Insurance
      4. Medicaid
    2. 23 Guardianship, Power of Attorney, and Health-Care Directives
      1. Considering a Guardianship
      2. Durable Power of Attorney
      3. A Living Will and a Health-Care Power of Attorney
      4. Organ Donation
      5. Last Words, Last Rites, and Other Finalities
        1. Burial Wishes
        2. Plan for, but Don’t Prepay for, Your Funeral
    3. 24 Parents, Marriage, Divorce, and Disability
      1. Caring for Aging Parents
        1. Managing Property
        2. Living Arrangements
        3. Medical Care
        4. Life Insurance
        5. Estate Planning
        6. Community Resources
        7. Long-Distance Caregiving
      2. Marriage or Divorce
        1. Getting Married
        2. Getting Divorced
      3. If You Become Disabled
      4. Checking Your Estate Plan
    4. 25 Estate Planning Throughout Your Life
      1. What Do You Still Need to Do?
      2. Single with No Children
      3. Single with Children
      4. Married with No Children
      5. Married with Children
        1. When There Are Minors
        2. When the Children Are Adults
      6. Retired but Not Retiring
      7. Final Thoughts
  10. Appendixes
    1. A Glossary
    2. B Online Content Key
  11. About the Author