Estate Planning For The 21st Century

The Properly Drawn Estate Plan Should:

Minimize or Eliminate Estate Taxes		The estate tax exemption, currently $2,000,000 per person, will reach $3,500,000 in 2009. For a husband and wife, the exemption can effectively be doubled so that with proper planning, assets equal to twice the exemption amount may pass tax free to children while still providing for the support of the surviving spouse.
Manage Assets for Children		In the event both parents die in a common disaster, create a vehicle to manage assets for children until they reach a specified age, e.g. 25.
Protect Children of Prior Marriage		Provide income and assets for the spouse of a second marriage while insuring that specified assets pass only to specified children or heirs.
Coordinate Retirement Plan Benefits		Maximize options and income tax deferral by proper beneficiary designations for IRAs, 401(k)s and other retirement plans.
Maximize Income and Deductions with Charitable Gifts		Provide increased income and receive income and estate tax deductions while still benefiting your favorite charity.

The Properly Drawn Estate Plan Should Include:

A Living Trust		The Living Trust, also known as a revocable trust, is recognized by the laws of all 50 states. It is a separate legal entity capable of owning and transferring property. The trust is completely amendable and revocable. Upon death, property is held and distributed in accordance with the terms of the trust. Separate tax returns are not required. Lifetime administration of the trust is simple. The creator of the trust may act as trustee and manage assets with the assistance of a financial consultant, trust company, or other investment counselor.
A Will		A trust does not eliminate the need for a will. The will is the document used to name a guardian for minor children. Otherwise, the will, known as a "pour over" will, simply names the trust as the sole beneficiary upon death. Assets are then held and/or distributed in accordance with the terms of the trust.
A Power of Attorney		Authority given to an agent to sign documents and otherwise handle legal and related matters if you become unable to do so.
Healthcare Power of Attorney		Authority given to an agent to make healthcare decisions for you should you become unable to make those decisions yourself.
Living Will		States to what extent life saving measures are to be used in the event of terminal illness or injury.

Amounts Exempted from Federal Estate Tax:

Year	Amount
2004-05	$1,500,000
2006-08	$2,000,000
2009	$3,500,000
2010	Repealed*
2011	$1,000,000

* After the 2008 election, there is talk of Congress repealing the repeal of the estate tax, setting the exemption at $3,500,000 or higher, and indexing the exemption for inflation.

Janson & Koppenheffer, LLP
Attorneys At Law
37 Bank St.
Lebanon, NH 03766