Estate Planning

Broadly speaking, it is an estate plan that encompasses the accumulation, conservation and distribution of an estate. A good plan will enhance and maintain the financial security of individuals and their families.

Estate Planning Team

Each member of the estate planning team has a particular specialty and takes parts to contribute with their integral role to accomplish the estate owner’s objectives.    Members include an attorney, an accountant, an insurance agent, a financial advisor, a trust officer, and a beneficiary.

Gift vs. Bequest

Gift is a transfer made during one’s lifetime, thus, referred as inter vivos. On the other hand, bequest is a transfer that takes effect on death, thus referred as testamentary.


In most United States jurisdictions, any person over 18 and of sound mind can draft his or her own will without the aid of an attorney.  The testator, one who wrote his/her will must include the signature and declare the final beneficiary information. After the testator has dies, a probate proceeding may be initiated in court to determine the validity of the will. If there is no will, then estates are divided by applicable state law and transferred.

Living Trust

The big advantage to making a living trust is that property left through the trust doesn’t have to go through probate court. In a nutshell, probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it. The problem with probate court is that average probate drags on for months before the inheritors get anything. Probate process reveals the content of the will whereas no information is made public with living trust. It can be updated at any time before death. Another advantage of having a living trust is that tax saving plans can be made ahead of time. Small estates still need living trusts so that it may save time and money.

Estate Tax

The estate tax is a tax imposed on the transfer of the “taxable estate” of a deceased person. The estate is valued at the date of death. Estate tax exemption amount for 2008 is two million dollars. Transfer amount to a surviving spouse (a U.S. citizen or a resident alien) is exempted and unlimited for estate tax purpose.

Gift Tax

If you gift more than the annual exclusion amount to one person in a single year other than your spouse, then you will have to file a gift tax return. But you still won’t have to pay gift tax unless you have given a very large amount. The rules let you give a substantial amount during your lifetime without ever paying a gift tax. As of 2008 the amount is $1,000,000.