J. Kelly Kennedy, Attorney/CPA, PLLC

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Attorney and CPA

Estate plan checkups for baby boomers

The time has come for baby boomers in Florida to think about their estate plans. If a boomer already has an estate plan, then checking up on it is a good idea to ensure that it is current with the needs of the heirs and the estate owner.

One thing is clear: when people neglect to draft end-of-life documents such as wills and trusts, the estate automatically passes through probate, which can be a long and costly process. An ironclad will or a trust can mitigate the consequences of probate or even make it unnecessary. These documents can also prevent future probate-related headaches for family members.

Setting up a solid trust typically requires help from an estate planning attorney, and many people put off drafting a trust until it is too late. However, the money and time saved in the long run is worth establishing the trust now.

Another issue that baby boomers without an up-to-date estate plan will face is the death tax. Until Dec. 31, 2012, the death tax will only affect people who die with a net worth greater than $5.12 million. However, beginning in January 2013, only the first $1 million of an estate will be exempt from this costly tax.

For estates with values exceeding $1 million, the excess value will be taxed at 43 percent. Though not all instances of the death tax can be avoided, baby boomers can protect up to $2 million with a credit shelter trust, which can also be obtained by consulting with an attorney familiar with estate planning instruments and the various ways of preserving assets.

Source: Fox Business, "What Boomers Need to Know About Estate Planning," Casey Dowd, Sept. 13, 2012

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