Year End Planning

WOW!  It is time already to start thinking about the Year End Planning push.  Taking advantage of annual gifting opportunities generally leads to a busy end of the year for us estate tax planners.  With 2010 just a couple months or so away AND no new estate tax legislation yet, I fully expect this year to be busy as well. 

Life Insurance Trusts.

Life insurance continues to be a uniquely favored asset for estate tax purposes. If insurance on your life is acquired by a properly drafted and administered life insurance trust (or an existing policy is transferred to such a trust by gift or sale, it is possible for the insurance proceeds to be excluded from the client’s taxable estate (three year lookback period for gifts). A life insurance trust is especially useful if you are property rich and cash poor, as it can provide your family with a cash flow to pay for estate taxes and administration expenses. If you are considering the purchase of significant life insurance policies, or already have them in place, please consider creating life insurance trusts.

Planning Tip: Funding

Many people have set up revocable living trusts to avoid the costs, delays and publicity of probate after they die. But all too often they do not change titles of their assets to the name of their trusts. This process is called "funding" the trust. If you have not funded your living trust, you have simply wasted your money. Any assets still titled in your name will have to go through probate - just what you were trying to avoid. Talk to your financial advisor team about funding your living trust right away. And be sure to title new assets in the name of your trust as you acquire them.