Orange County Estate Planning Attorney Outlines What Women Should Know About Estate Planning, Part 1 of 2February 9, 2012Asset Protection, Estate PlanningNo Comments
Women outlive men, make less during their careers and have less in savings due to pay discrepancies and time taken out of the workforce to raise their children. In the opinion of this Orange County estate planning attorney, this is why it is important for women to know these important estate planning facts:
The unused portion of a deceased spouse’s estate tax exclusion can be transferred to the surviving spouse’s exclusion through 2012 (unless Congress acts) – which means the surviving spouse can have an estate tax exclusion of up to $10.24 million. However, this exclusion transfer must be claimed by the deceased spouse’s executor filing an estate tax return.
Assets inherited or received as a gift from a spouse are not taxable. A surviving spouse has nine months to renounce any gifts received from the deceased spouse, so it can be transferred to another family member or put into a trust for their own benefit.
Married couples can participate in “gift splitting”, which means they can share each other’s $5 million lifetime gift exclusion and give more to their children now tax-free.
A will and a living trust are both essential estate planning tools, and although both can be used to transfer assets upon death, they serve separate purposes. A living trust can take effect while you are alive or after death, and allows you to hold assets for your benefit during your lifetime, which can be helpful in the case of future incapacity. A living will can also be beneficial if you own real estate in another state. A will only takes effect upon death, and is used to appoint guardians for minor children, cover assets that are not part of a living trust and create trusts that kick in after death.
Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.