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What is Estate Planning?
Too many people equate estate
planning with reducing taxes. Actually, there is a simple way to pay no
estate taxes -- leave everything to charity. What's that? You say that
wouldn't leave anything for your family? Okay, so let's focus on what
you want to accomplish.
Congress, in its finite wisdom,
has decided that no tax need be paid by estates under $X. In 2003 X is
equal to $1,000,000 increasing eventually to $3,500,000 and then going
back to
$1,000,000 (see
THE TAX LAW OF 2001). As the parent of a teenager, does that mean you feel
comfortable with them getting $600,000 at 21? See
Trusts.
I consider estate planning a
process in which we:
Identify what you want to
happen, in event of your incapacity or death
Identify the assets you have
to accomplish those goals
Devise a plan to direct the
assets toward the goals
Implement the plan
In that process we will seek, to
the extent consistent with the goals, to maximize assets (e.g. by
getting insurance).
As part of that process, to
the extent consistent with goals and higher priorities, we will
seek to reduce taxes. Even though there are many tax saving techniques
presented, they are ultimately tools to accomplish your goals.
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