If you die without a will, your property goes where the state tells it to go. Being will-less is called being “intestate.” Each state has its own intestacy statutes that determine what happens to your estate when you have no will.
However, not all property is covered by these statutes (or included in a will if you have one). This property will transfer to whoever you name as beneficiary or to a surviving co-owner. This includes proceeds from a life insurance policy, property you have already transferred to a trust, retirement account funds, such as 401(k)s or IRAs, property owned in joint tenancy with someone else, real estate held by beneficiary deed or by transfer-on-death, payable-on-death bank accounts, and securities held in a transfer-on-death account. Continue reading “Where Does My Property Go If I Die Without a Will?”
Single adults who are not in a long-term relationship have unique estate planning concerns. If they are 18 and older, it usually makes sense for them to have estate planning documents in place.
Here are some common issues that come up for single people with estate planning.
YOUR DIVORCE: Colorado law automatically voids all appointments of and bequests to a former spouse in a will. It is critical that a divorced person prepares new documents that are wholly operational in this context. Continue reading “What Single People Should Know About Estate Planning”
When it comes to issues relating to family law and estate planning, it’s not usual to be unaware of how the system works until it’s your turn to be involved in it. And at times, particularly during an election cycle, gift and estate taxes are in the news with a lot of political arguments attached to them. But when these taxes affect you and your family, the facts are more important than the politics. So I wanted to share with you 12 facts about estate and gift taxes that you need to know when dealing with estate taxes and gift taxes.
- Estate tax and gift tax are different. Estate tax is a tax on transfers at the time of death. Gift tax is a tax on lifetime transfers. Colorado has not had an estate tax in over a decade. Other states may have an estate tax. Under federal law, transfer taxes occur on both combined IF they total over $5.67 million in a lifetime (over $11.34 million for married couples with portability).
- Estate and gift taxes are politicized. Congress changes these taxes over the years for different political reasons, so they are moving targets.
- Donor intent is irrelevant. In determining whether something is a gift, it does NOT matter whether the person intended to give a gift. If the parameters are met or not met, it is or is not a gift regardless of the intention of the donor.
- The identity of the beneficiary is irrelevant. It does not matter who the beneficiary is in determining whether there was a gift. It is simply that the owner retains the right to change the beneficiary that counts (see No. 5 below).
- The gross estate includes more than what you own. The gross estate includes all items owned at time of death plus items included by the Internal Revenue Code (IRC) such as life insurance, life estate transfers, the power to designate a recipient, transfers with retained powers, stocks given with retained voting rights, shell family “business” arrangements set up to avoid tax, revocable transfers, reversionary interests, reciprocal trusts, joint property, joint spousal interests, powers of appointment, annuities, qualified retirement plans and pensions. What do all these things have in common? The giver retains a power to make a change. So, when you think about it, the giver is also to an extent a “keeper” (retaining incidents of ownership) and therefore the items are rightfully included in the gross estate.Gifts made in contemplation of death are also included in the gross estate. The IRS wants to discourage death bed conveyances (within 36 months of dying.) However this has been chipped away at so now it generally only applies to life insurance as a practical matter.
Continue reading “Estate and Gift Tax: 12 Things Those Transferring Millions Should Know”
When it comes time for couples to consider estate planning, there are several aspects of it that must be looked at and decided on. Below are 16 points of estate planning that you and your spouse may need to address, depending on your situation.
Preserving the Estate on the Second Death: If a spouse changes their will on a second marriage, it is possible that the children of the first marriage will not get anything. This happens because the first spouse’s children from a prior marriage did not inherit; their parent’s spouse got everything. That person may well remarry and leave everything to their new spouse, not to their stepchildren from a prior marriage. To avoid this problem, communicate, use a marital agreement, use life insurance, consider QTIP trusts.
Life Insurance: You may want to get a life insurance policy to protect your children from a prior marriage, naming them or a trust protecting them if they are minors, as the beneficiary of that policy. This way you protect “yours” from the scenario set forth in No. 1. Continue reading “Yours, Mine & Ours: Estate Planning for Married Couples”