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Friday, July 22, 2011 Recent Press Coverage of Estate Planning (July 22, 2011)
Hani Sarji of Forbes notes that this is a great time to use gifts as an estate reduction strategy if you live in a state that has an estate tax threshold lower than the current federal estate tax threshold of $5 million per person ($10 million for a married couple). If you live in a state that has its own estate tax but no gift tax, like Vermont, then you can gift property during your life to reduce your estate value to less than the state estate tax exemption level, and still avoid gift taxes on the federal level. The current high gift exemption level extends only through 2012, so you need to plan ahead accordingly. See How to Cut State Death Taxes – Without Moving (July 13, 2011).
Jay Adkisson writes in Forbes about ten rules to keep in mind regarding asset protection. Most importantly, there are many strategies available if you start planning before a claim arises, but few that work after a claim or liability arises. And engaging in asset protection after a claim is filed is likely to make matters worse. Other rules include pairing asset protection with insurance, ensuring personal assets are not placed in business entities, and avoiding asset protection plans that are so complex they are hard to clearly explain. See Ten Rules for Asset Protection Planning (July 13, 2011).
Ashlea Ebeling of Forbes discusses ways to avoid a protracted battle over your estate. Advice includes treating siblings equally, making a list of specific items that should go to named heirs, keeping track of loans and advances, including a “no contest” clause, and spelling out clearly if you intend to disinherit someone. See 10 Ways to Lawsuit-Proof Your Estate (July 13, 2011).
Deborah L. Jacobs of Forbes reviews the unusually difficult challenges facing executors of people who died in 2010, a year when there was the option to avoid the federal estate tax (but pay capital gains taxes) or apply the estate tax law as it exists in 2011 with its $5 million exemption level. Issues include locating purchase records to determine cost basis for many assets, coping with new paperwork and forms issued by the IRS for this unusual year, and meeting the fiduciary obligations of impartiality when one of several available strategies benefits one group over another. See New Heirs Face Confusing Tax Choice (July 13, 2011).
Janet Novack of Forbes writes about ways to pass on frequent flyer rewards before or after you die. Each program has its own set of rules, but several allow a parent or grandparent to use their miles to purchase tickets for someone else. Also, ensure someone has your list of accounts, passwords and usernames, because some plans don’t allow transfer of points to an heir, but will allow someone to log on and redeem points after your death. See How to Pass On Your Frequent Flyer Miles (July 13, 2011). Wednesday, April 20, 2011 NEET Tips
NEET Tips answers questions posed by visitors to the NEET website
Is the guardian of a ward the ward’s executor after the ward dies?
Guardians and executors are two distinct roles, and while the guardian may become the executor, the Probate Court will address the issue of who should be the ward’s executor independently of who was previously named as guardian. Tuesday, April 19, 2011 NEET Tips
NEET Tips answers questions posed by visitors to the NEET website
Is it necessary to have the probate court appoint an executor if the executor has already been named in the deceased person’s will or trust?
Yes, because an executor is not authorized to act in the capacity of executor until being appointed as the executor by the Probate Court. The will states the decedent’s preference that the named person serve as executor, but it will be the Probate Court that makes the final decision. If the person named to fulfill the role of executor files the will with the Probate Court and no interested persons object to that person being executor, the Probate Court usually acts very quickly to issue Letters Testamentary appointing the person as executor of the estate. If any of the interested persons object, then the Probate Court usually holds a hearing to discuss the objections and whether the named person should nonetheless be appointed executor. Monday, April 04, 2011 NEET Tips
NEET Tips answers questions posed online to the NEET website
What happens if the executor dies after the will maker?
The executor is named by the probate court to manage the probate process. If an executor dies in the midst of carrying out their responsibilities, the probate court will name a new executor to take over. The probate court would review the will to see if a backup executor had been named by the decedent. If so, the probate court would likely name that person absent a compelling reason not to. If no backup was named, the probate court would seek to name a willing survivor of the decedent who was in the best position to take over the responsibility. Tuesday, October 06, 2009 Estate Planning Tip of the WeekWhat is the Difference Between a Power of Attorney and an Executor?
Literally, a lifetime of difference. Powers of attorney of all sorts are effective only during the principal’s lifetime, whereas an executor’s powers come into being only after the death of the principal.
Powers of attorney are documents whereby an individual (the principal) authorizes someone else (the agent) to act on the principal’s behalf. This could entail the agent’s signing papers to bind the principal to a contract, engaging in financial transactions on behalf of the principal, or in the case of an Advance Directive, declaring what medical treatment the principal would want, or not want, if the principal is unconscious or otherwise unable to communicate their medical wishes. Powers of attorney are important documents that can be invaluable if the principal is injured or falls ill. However, because many powers of attorney for finances are very broad, it is essential that the principal pick as an agent only someone that they have absolute trust in. Even though the agent has fiduciary obligations to the principal, a broad power of attorney in the wrong hands can cause all sorts of problems.
An executor is someone you name in your will to manage your probate estate. Because a will does not take effect until your death and your choice of executor must be approved by the Probate Court, an executor does not have any authority to act until after the probate process has been initiated. Choosing an executor, much like an agent, is an important issue. Executor’s should be detailed, fair-minded and conscientious, and someone who will carry out your instructions in your will as precisely as possible. | |
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Welcome to NorthEast Estates and Trusts, PLLC (NEET). NEET assists clients with Estate Planning, Probate and Estate Administration, Special Needs Planning and Advanced Estate Planning matters in Shelburne, Vermont as well as Charlotte, South Burlington, Burlington), Hinesburg, Essex, Essex Junction, Colchester, Winooski , Cambridge, Huntington, Richmond, Williston, Jericho , Underhill , Underhill Center and Fairfax. NEET also serves clients in Chittenden County, Addison County, Washington County, Lamoille County, Franklin County and Grand Isle County.
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