wills and trusts

Apr 19, 2007 4 Replies

Rate this thread:

John N 19 years ago

hopefully within scope of the NG.

we created 20+ years ago, with the assistance of an attorney, a simple will as at the time our kids were small

we have one 401k plan and individual IRA and Roth IRA accounts

now, still with a very modest estate, total value at present about 1M or 1.2M, am wondering if, from a financial planning perspective, it would make sense to update the will and perhaps add some kind of trust that would add or explain features

what kinds of trusts do individuals normally have? someone with just a modest 1M estate?

living in florida, it's my understanding the state gives an exemption up to 2M per spouse, so there are no estate taxes but am sure there is more to it - can anyone point me to a link or add some information - questions are welcome too

Vote

kastnna 19 years ago

Actually, you are in the clear TO DATE. Assuming you didn't already have a trust, at your death your estate passes entirely to your spouse without taxation under the "unlimited marital deduction."

When your spouse dies your heirs calculate the total estate subject to taxation and then deduct whatever "federal estate tax exemption" is in place at that time. At this time it is $2M, it will go to $3.5M in

2009 and the estate tax is completely repealed in 2010. However, hell- bound snowballs have a higher likelyhood of survival. Bottom line is that as long as your estate is less than or equal to the exemption amount, your heirs will owe no estate taxes. Any amount over that is taxable up to 45%.

Keep in mind that it is very easy to appreciate $1.2M to a number well over the current exemption amount. Even moderate growth over the next

20 years (I don't know your age) could result in your having $4 - $7 million. We also have no solid idea of what the soon-coming changes to the estate tax laws will precipitate.

Vote

Elle 19 years ago

"kastnna" wrote

To be a tad more reflective of the archives, I think this should read "anti-deferred annuity" posters.

Vote

John N 19 years ago

could we also update ourselves the old will, simply by creating a single sheet of paper titled "Addendum to the will of Mr and Mrs John N Living Dated 04/19/2007" ? Then simply list the items that have changed and have 2 someones witness our signatures?

Vote

kastnna 19 years ago

Among other thigns, a Will is subject to probate. A trust is not. That may or may not be a big deal but it is one of the main reasons for creating a living trust.

Vote

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required