What the IRS Says about Estate Taxes | Savannah Estate Tax Lawyer

Estate tax lawyers in Georgia spend a lot of time learning and relearning tax law, as provisions change continually.  In addition to knowing about the various types of state taxes that could affect an estate, it’s also necessary to keep up to date on what the federal Internal Revenue Service has to say about these things.

When a US citizen passes away, he or she has the right to transfer property to others.  Before this can happen fully, however, the federal government wants to see a full accounting of what was owned.  This means that someone, often with the assistance of a qualified estate tax lawyer, will have to ascertain the current fair market value of the deceased assets.  These assets might include cast, securities, trusts, annuities, insurance, business interests, real estate, and more.  When all of the assets’ values are added up, the total is the “Gross Estate.”

Fortunately, the entire estate may not be taxable.  An estate tax lawyer in Savannah will be able to assist the executor of the estate in determining if there are applicable deductions that should be considered before coming up with a final number known as the “Taxable Estate.”  For example, some charitable donations, property being left to spouses, certain debts, and even the costs of administering the estate may all be deducted before determining how much is actually taxable.

But, that still isn’t the final number.  There may be some “lifetime taxable gifts” that also need to be included and then reduced again by what is called the “unified credit.”  Obviously, this area of law is pretty complicated, which is why individuals are strongly encouraged to consult with a Georgia estate tax attorney, not only during the distribution of the assets—but more importantly, when the estate plan itself is being drawn up.  Estate tax lawyers have considerable insight into how to create a plan that legally minimizes the amount of taxes that will eventually be paid.

Smaller estates don’t have to file an estate tax return with the IRS, but larger ones do.  The threshold at which this is required changes annually.  In 2014, an estate tax return needs to be filed on those with a combined gross asset and prior taxable gift total of $5,340,000. or more.

For those doing their estate planning now, it is absolutely in their best interest to talk with a lawyer who is well-versed in estate tax law.  This person can advise you on how to make appropriate gifts during your lifetime that will lower the gross estate later.  Additionally, it may be beneficial for an individual to consider putting funds into certain types of trusts in order to avoid having them heavily taxed.  This is one of those areas where paying a little up front (in the form of estate tax lawyer costs and some filing fees) can pay off hugely later for the beneficiaries of your estate.

Robin Williams, ‘Affluenza’ and Your Savannah Estate Plan

The death of beloved actor and comedian Robin Williams was a sad event for many, but those most struggling would be his children.  Williams had an estate plan that was created in a way that worked to protect them from a multitude of issues—including what has been coined “affluenza.”  This term refers to children of the very rich who become somewhat disconnected from reality due to their financial means.

There have been cases where a court of law has determined a young person doesn’t have to take responsibility for his or her own actions because extreme wealth left them without an understanding of consequences.

Robin Williams, a truly loving father by all accounts, worked to ensure that his children would not fall victim to affluenza when he and his estate planning lawyer developed his children’s trusts.  The trusts created during Robin Williams’ estate planning weren’t dependent upon his death, but it has certainly brought them into the public’s awareness.

Funds were already being dispersed to his children while he was still alive.  This is a method that parents can use to ensure their kids have an income while also being available to help them learn how to handle it.  According to reports, Williams three children have and will receive portions of his assets at ages 21 (1/3 of their share), 25 (half of the balance), and 30 (the remainder).  This approach allows for children to become adept with their money over time rather than having a large sum given to them all at once with no prior knowledge on how to handle it.

In Robin Williams’ case, he chose to have his children receive their money when they reached certain ages.  This is just one method for dispersing a trust.  A parent can tie the money to specific achievements—such as graduating college or becoming a parent themselves.  Estate planning lawyers are able to help outline the requirements of a trust to create terms that fit their family’s specific needs and desires.

It is also worth noting that trusts can have some very valuable tax benefits when compared to leaving an inheritance via a will and/or the probate process.  With so many advantages to this type of arrangement, many parents are choosing this proactive approach with their estate planning lawyers.

To learn how a trust may be beneficial for the protection of your assets and loved ones, please contact our Savannah estate planning law firm at (912) 352-3999.  Simply mention this article to schedule a comprehensive planning session at no-charge.

Savannah Estate Planning: It’s Not About You

Of course, any Savannah estate planning lawyer’s goal is to satisfy the client; but in the long run, a lot of estate planning is focused on those who are left behind.  In creating an estate plan that disperses your assets in the way you want, you are creating a legacy and supporting your family, friends, or favorite causes for their own futures.  It’s a noble and wonderful thing to do.  It’s also kind of complicated for those who are left.

It’s likely that when you pass away, your family will be dealing with their own grief, in addition to the legal aspects of inheritance.  It’s a difficult time.  One of the ways that estate planning lawyers know of limiting confusion and difficulties is to create an organized plan for getting everyone the information they need.

For most people, important information is kept in a variety of places.  Some might be on your computer, some in the filing cabinet, and still more in a safe deposit box.  Your estate planning lawyer in Savannah will also have information that beneficiaries need to access.

With all that in mind, would your family know where to find everything?  There’s a pretty good chance they would not.  You can help take away worry and frustration by getting things organized, and your lawyer can help you figure out how.

A fairly easy approach is to start creating an inventory of your important documents.  Make a list of the important things your family, friends, or lawyer would need to know—not just in case of death, but also if you were to become medically incapacitated.  In addition to listing these items, you should also make sure to note where they are located and include any contact information needed to access them.  For example, include information for your estate planning lawyer, doctors, insurance agents, etc.  Some of the things your list should detail might be:

  • Will
  • Living trust
  • Health care documents
  • Powers of attorney
  • Medications you take
  • Accountant
  • Insurance agents
  • Financial planner
  • Insurance policies
  • Bank statements
  • Stocks, bonds, and other investments
  • Deeds and titles to property
  • Information on safe deposit boxes (and keys to them)
  • Storage facilities
  • List of assets
  • Debts
  • Information on money owed to you
  • Benefits
  • Tax returns

Additionally, it’s helpful to create a list of all of your online accounts—whether social media or financial—along with your login information and passwords.

None of this information will be useful if no one knows it exists, so be sure that you have told a trusted person how and where to find the inventory.  Your estate planning lawyer in Savannah will likely advise you to keep originals in a safe deposit box or fireproof safe with copies or even just notes in a binder that can be accessed by the person you’ve designated in case of emergency.

While there’s no doubt that creating this inventory is a time consuming process, keep in mind that if it’s hard for you, it will be considerably harder for someone who is not you!  Once it’s all together, though, your estate planning lawyer can tell you that it becomes much easier to simply update it when changes are needed.

Savannah Estate Planning for Couples Marrying Later in Life

Couples who choose to marry later in life have different concerns than those marrying earlier, and a good Savannah estate planning lawyer can help you make the right decisions for your circumstances.  Each situation is a little different, but there are some fairly common topics that should be considered:

  1. Do the husband and wife have grown children?  If so, then the estate plans will likely need to include specific instructions regarding how inheritance will work.  This is fairly important to ensure that each biological and stepchild receives what the parent wishes, rather than allowing Georgia laws to supersede your desires.
  2. Does each intend to be the beneficiary of the other?  Older couples who marry may already have their own plans for their estates, and sometimes these don’t involve one another at all.  If spouses do not intend to inherit from one another, they will likely need a legal agreement that clearly spells this out.  Without it, spouses will almost always inherit, despite plans that were made to the contrary.
  3. Who will pay medical expenses?  If one spouse becomes ill, it may be the responsibility of the other spouse to help pay for medical expenses.  A prenuptial agreement can help to limit this, although Medicaid rules will supersede a prenuptial agreement when it comes to determining eligibility.
  4. Is one partner widowed?  Some older couples today have chosen not to marry because it can stop pension or social security benefits from a previous marriage.  This is something that should be carefully explored with your Savannah estate lawyer.
  5. Should you have joint accounts?  When older couples marry, it is sometimes recommended to keep assets separate.  This extends to bank accounts and titles on property.  Any assets that are in both names can go to the survivor, even if a prenuptial agreement stating otherwise was in place.

An additional role of the estate planning lawyer may be to help older couples uncover other areas of concern that are not obvious at first glance, such as updating old legal documents to reflect the new relationship and advising on tax and asset protection strategies for the married couple.

Finally, when it comes to administering the estate, older couples usually do best by choosing an independent trustee.  The passing of a loved one notoriously brings out the worst in people, so naming either your or your spouse’s child as the trustee can have unexpected negative consequences.  Your estate lawyer in Savannah can help you identify a good candidate or even recommend a trust company to keep your will or trust from being ignored or misused.