If I Had a Million Dollars: More (Estate) Money Than You Knew
This morning I explained to someone how a credit shelter trust works (the complicated-sounding structures I wrote about yesterday on my blog). He said, “that’s great, if only I had a million dollars in the first place.” By the time we ended up counting all of the assets in his estate plan, including life insurance, he found that he had more than he knew. Not money he could spend today, but money that (if still in his estate) will go to his heirs at some point. Or the government, if he doesn’t plan well. The only question is when, and hopefully later rather than sooner.
Whether or not you believe that you have a considerable estate, after speaking with an estate planning attorney or financial professional or simply tallying your assets on your own, you may be surprised to find that you have more than you imagined. You don’t need to feel “rich” to have a taxable estate; you only need to have enough to exceed the exemption amounts.
An “estate” for estate tax purposes comprises all of your assets, including:
- real property (such as your house, vacation home or time share – 1/2 if owned jointly and equally with spouse or another individual),
- personal property (cars, furniture, antiques and other property),
- bank and investment accounts,
- retirement accounts (401k, 403b, Roth IRA, etc.),
- stocks, bonds and other securities,
- monies owed to you (including salary and bonuses),
- your portion of any closely-held business, and
- any life insurance you own.
Taking five to ten minutes to assess your estate, five to ten hours to work with a lawyer and five to ten weeks to put something in place may save you more than five to ten thousand dollars in estate taxes. It could potentially save you five to ten hundred thousand dollars or more, especially if your estate grows over time. Money you didn’t think you even had (to pass on). It all depends on how those nickels, quarters and dollars add up.
Anne Marie Segal is admitted to practice law in New York and Connecticut. She provides legal counsel to businesses and individuals at Law Office of Anne Marie Segal. Please visit her website at www.amscounsel.com for more information. None of the information posted on this site constitutes legal advice or forms an attorney-client relationship. This is a public forum. Please do not post confidential or fact-specific information regarding your legal questions on this site.