When it comes to estate planning, I think it’s safe to say you’ve never “seen it all.” But I’ve seen a lot… people that did virtually no planning and wrote huge checks to the IRS for estate taxes. A case where everything was left to a county government. And one of the most creative cases involved a trust designed to distribute the estate to the children in thirds: 1/3 immediately upon death, 1/3 in 5 years and the last 1/3 after 10 years. If they squandered the first 1/3, they would get another chance in 5 years and again in 10 years.
It’s important to think ahead if you have been fortunate enough to have a nice-sized estate. The people you want to benefit from your hard work won’t necessarily end up with it if you don’t plan. With the estate tax exclusion allowance scheduled to drop from $5.1 million to $1 million after the end of this year (without further congressional action), some people whose wealth might be tied up in their business (i.e. a small business or farm) could be in a challenging situation….maybe enough to impact the viability of the business.
There’s plenty of suitable strategies out there to help you keep more of what you’ve earned and pass it on to those you want to receive it, whether family, charity, or (in some cases) a local government. You may even be able adopt your girlfriend! http://thetrustadvisor.com/news/adoptedgirlfriend The key is to get with your financial and legal advisers and design your strategy.