Trusts and Estates Blog

What You Need to Know About the Generation-Skipping Transfer Tax

Hiring an estate planning attorney could make all of the difference in your family’s financial certainty.

As estate laws constantly change, and the economic landscape becomes increasingly unstable, the assurance of knowing that you have covered all the bases you need to cover can be worth more than its weight in gold (as the saying goes).

For example, in planning for the allocation and distribution of your assets on the event of your death, would you consider such taxes such as the generation-skipping transfer tax?

Would you know what it is?

The generation-skipping transfer tax (GST) is a 45% tax that is applied to estates that are either passed on to grandchildren, thereby skipping one’s children, or to someone who is at least 37.5 years younger than the deceased.

Some other information you might not have known about the generation-skipping transfer tax follows:

- This tax was initially created as an attempt to dissuade savvy estate planners who used the generation-skipping technique as a way to circumvent the regular estate tax.

- The generation-skipping transfer tax is repealed, as of the year 2010, but will be reapplied to all estate transfers in 2011.

- There are lifetime exemptions to the generation-skipping transfer tax, and a highly qualified estate planning attorney who has experience in overseeing the transfer of estates will be able to counsel you regarding these exemptions.

The generation-skipping transfer tax is just one of many examples of why having a estate planning attorney who is well-versed in estate law is important – not only for your own certainty, but for the peace of mind it could bring to your family and loved ones who are counting on you to stabilize their financial futures.

Navigating the complicated arena of estate and tax law on your own could potentially be detrimental to your careful planning.

With a large number of individual taxes, loopholes, and penalties imposed by various entities, your hard-earned money could find its way into the hands of someone other than your own family.

Why take that risk, when an expert can guide you toward the best opportunities that are available to you in consideration of your individual estate planning goals.

If you would like more information concerning your estate planning options, check out the comprehensive online resources for personal wealth management solutions through wills and revocable trusts.

Whether your estate planning goals are immediate or long-term, a qualified California estate planning attorney will be able to counsel you on the best options available to you to meet your individual needs.

Kevin Von Tungeln is the Managing Partner of EstatePlanningSpecialists.com and Thompson Von Tungeln, P.C. Kevin practices exclusively in the areas of estate planning, probate, wills, conservatorships and trust administration.Visit http://www.EstatePlanningSpecialists.com or http://www.linkedin.com/in/kevinvontungeln to learn more.

Article Source: http://EzineArticles.com/?expert=Kevin_Von_Tungeln

No Contest Clauses in Wills – When a Creditor Files a Claim

A no contest clause traditionally consists of specific language included in a California will or trust that attempts to prevent any legal dispute against the will after the testator has deceased. A no contest clause, for the most part, does help to discourage legal disputes over a will, except in cases for which the contesting party can offer significant proof of forgery, duress, or problems with validity of the instrument. For most no contest clauses, the language specifically states that any beneficiary of the will stands to be disinherited should he or she decide to pursue unjustifiable litigation in dispute over some aspect of the provisions of the will.

There are, however, certain exclusions to the enforcement of no contest clauses, including among others, when a creditor files a claim against the estate of the testator. Unless the language of the no contest clause specifically includes the circumstances of a creditor filing a claim, the act of doing so would be considered an exclusion to the clause, and therefore, a legitimate reason for a beneficiary to file a dispute without running the risk of losing his or her inheritance.

Many California wills now include standard no contest clauses that include specific language relating to when a creditor files a claim against the estate after the testator has deceased. If so, the validity of such a clause might still be brought into question, and recent California legislation has paved the way for making the entire no contest clause invalid, regardless of the language included within it.

Since the new legislation will not go into effect until 2010, and although the bill will be retroactive for California wills that are currently being drawn up, it is still a good idea to include a no contest clause within your will that includes language relating to when a creditor files a claim against your estate. In this case, a little defense is better than no defense at all, and your estate has a better chance of being legally protected (at least, for a short time) with such a clause.

If you have additional questions concerning no contest clauses, or the California legislation changes surrounding them, a qualified California estate lawyer will be able to give you the best advice concerning the inclusion of a no contest clause in your estate planning options. A highly skilled California estate attorney, with experience in litigating no contest clauses in California, can offer you educated solutions to all of your estate planning needs.

Kevin Von Tungeln is the Managing Partner of EstatePlanningSpecialists.com and Thompson Von Tungeln, P.C. Kevin practices in the areas of estate planning, probate, wills, and trust administration. Visit http://www.EstatePlanningSpecialists.com or http://www.linkedin.com/in/kevintungeln

The FDIC and Living Trusts – When You Have More Than Five Beneficiaries

In a press release sent by the Federal Deposit Insurance Corporation (FDIC), as of September 26, 2008, new rules apply to deposit accounts held in revocable trusts or living trusts, as well as payable-on-death accounts. These new rules are an attempt to simplify FDIC guidelines and promote consumer and investor confidence in our nation’s banking industry.

In short, where the FDIC once only insured beneficiaries of revocable trusts who qualified under FDIC guidelines (namely, the account owner’s spouse, children, grandchildren, parents, or sibling), the new and interim rule applies to any beneficiary named in the trust, including distant relatives, friends and charities.

Additionally, the insured amount on accounts held in living trusts is based on the number of beneficiaries. Thus, under the new limits secured by the Emergency Economic Stabilization Act of 2008, each beneficiary of the trust is insured for up to $250,000-as long as there are five or fewer beneficiaries named in the trust.

If there are more than five beneficiaries named in the trust, the FDIC’s new and temporary insurance limits are as follows:

- Revocable trust account owners who have more than $1,250,000 in a trust-owned account, and have named more than five beneficiaries are covered by the FDIC at the greater amount of either $1,250,000 or the sum of all the beneficiaries’ interest in the trust (limited to $250,000 per beneficiary).

- If the sum of the revocable trust account is less than $1,250,000 and there are more than five beneficiaries, each beneficiary is covered up to $250,000 per beneficiary, and according to each beneficiary’s stake in the trust.

Estate planning techniques constantly change to keep pace with changes in the law, and new legislation has made it even more appealing for people to set up revocable trusts or living trusts for their loved ones.

In situations such as the current economic downturn, having accounts owned by revocable trusts held in FDIC insured banks adds an extra level of security to your savings. You can rest assured knowing that your named beneficiaries will receive their inheritance even in the event of a bank collapse.

That kind of reassurance is worth every penny spent on a quality estate plan drafted by an experienced and specialized attorney. The government is making it safer for anyone wishing to further their estate planning goals to take full advantage of all the benefits a living trust can offer.

Whether your estate planning goals are immediate or long-term, a qualified California estate planning attorney will be able to counsel you on the best options available to you to meet your individual needs.

Kevin Von Tungeln is the Managing Partner of EstatePlanningSpecialists.com and Thompson Von Tungeln, P.C. Kevin practices in the areas of estate planning, probate, wills, and trust administration. Visit http://www.EstatePlanningsSpecialists.com or http://www.linkedin.com/in/kevintungeln.

Why Preparing an Estate Tax Plan is Critical

Trusts and Estates Blog