The timely, cost-effective drafting of wills and trusts calls for an attorney who is experienced in handling estate planning matters and dedicated to providing personal service. Contact our firm today to schedule a consultation and case evaluation with an estate planning attorney.
Information About Wills and Trusts
A will or a trust is a powerful legal vehicle. It can speak for you long after you have gone. It can provide for your family's future needs. It can give you peace of mind.
At Barlow & Murphy, LLP, we create personalized wills, trusts and other estate documents which help our clients achieve their goals, protect their assets, and provide for their families.
Some basic information about wills, trusts and estate planning appears below. You probably have questions about your particular situation. An attorney at our firm can answer your questions and discuss your specific needs.
Contact a Lawyer
For a consultation with Barlow & Murphy, LLP, call 877-259-4164 toll free or contact us online.
Located in Manchester, our firm serves clients east of the River and elsewhere in the greater Hartford, Connecticut area.
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Once a will has been created, it can be changed to address your evolving family and financial situations. Barlow & Murphy, LLP, can amend a will for an affordable fee.
A special needs trust can help you provide for the health care and personal needs of a disabled child while preserving the child's eligibility for government benefits. Contact our firm for more information.
Death and Taxes: Planning for Both
When you die, the assets and property interests you leave behind minus any debts make up your estate. Whether your assets go through probate or you have set up alternative means for transferring your property, any estate or other taxes owed at the time of your death must be paid. While taxes cannot be avoided, an estate planning attorney at Barlow & Murphy, LLP in Manchester, Connecticut, can help you minimize your estate's tax burden as much as possible.
Taxable Estate
When someone passes away, he or she leaves behind a taxable estate. Under current law your taxable estate for federal estate tax purposes can be significantly larger than your probate estate. Your taxable estate includes everything, such as:
- All your property interests. Including any property interests you own and property interests in a trust controlled by you outright or by a trust to which you have significant "strings attached."
- All your qualified retirement plan proceeds. Qualified retirement plan proceeds are included unless you retired no later than 1984. Persons retiring no later than 1984 may qualify for a full or partial exclusion of these proceeds.
- All life insurance proceeds. Proceeds from life insurance policies owned by you at the time of your death or payable to your estate.
Estate Taxes
Federal estate taxes are imposed on property transferred at death. In addition, many states also impose estate or inheritance taxes on the same property. The amount of the tax is set on a gradual scale which increases with the size of the estate. These taxes decrease the amount of the share that ultimately will be distributed to the beneficiaries.
The estate tax is set to expire in 2010 for one year. In 2011, the tax will be reinstated to pre-2001 standards if Congress does not act to make the repeal permanent. Currently, tax payers can shelter $2 million under the general estate tax exclusion, which will increase to $3.5 million in 2009. This means that if the total worth of the estate, less any debts, is $2 million or less, there will be no estate tax imposed. If the tax is reinstated, the amount tax payers can shelter will revert to pre-2001 standards of $1 million.
Gift Taxes
One way to minimize the amount of estate taxes that must be paid upon death is to transfer property while still alive. While there is a gift tax imposed on these types of transfers, many can take advantage of the gift tax exclusion. Under current tax law, the standard "lifetime" amount you can shelter is $1 million. This means that throughout a person's life, he or she can give up to a total of $1 million away and not have to pay gift taxes on it. There is a limit on how much can be gifted per year. Currently, a single person can gift up to $12,000 per person to an unlimited number of people per year while married couples can double it to $24,000 per person.
The gifts you give each year are totaled and once you have gifted over $1 million, that amount is subject to the gift tax. Currently, the highest federal gift tax rate is 45%. Thus, if you have gifted $1.5 million, $500,000 will be subject to the gift tax. These taxes are scheduled to gradually decrease to 35% in 2010. As with the estate tax exemption, if Congress does not make the change permanent, the rate will return to pre-2001 levels in 2011. Given the complexities of estate and gift taxes, it is important to work with a tax professional to take full advantage of these exemptions.
Conclusion
The tax issues surrounding your estate can be quite complex. An experienced estate planning attorney at Barlow & Murphy, LLP in Manchester, Connecticut, will help you address your tax issues and minimize the impact taxes have on your beneficiaries.
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