estate planning

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Estate Planning Attorney in Highland, IN

Contact Hilbrich Law Firm today; we can help you with all of your estate planning needs. The following list is provided as a reference for estate planning documents and considerations you may want to review when meeting with one of our attorneys.

Estate Planning Documents and Considerations

Last Will and Testament: A "Will" is an instrument which disposes of your estate following your death. It allows you to select to whom and in what proportion your possessions will pass and who will act as your Personal Representative to carry out your wishes. You generally execute only one original Will document. You may opt to keep your original Will on file at your attorney's office. If so, you should be provided with three (3) photocopies that are not originally executed, but contain all information in typed form for your records and review. It is generally not advisable to keep your Trust, Will, and/or advance directives in a safe-deposit box, as these items need to be easily accessible to your next-of-kin or estate Personal Representative.

Living Trust: A "Living Trust" is an arrangement whereby property is transferred from the settlor (person making the Trust) to a Trustee. Once the Trust itself has been executed, the ownership of your assets then must be transferred so that the Trust owns them. This should include all bank accounts, certificates of deposit, stocks, bonds, mutual funds, real estate, and nearly everything you own. Most Trusts are "self-trusteed", meaning that the individual establishing the Trust will also act as Trustee. Since you are the "Trustee", you maintain complete control. Upon your passing or in the event of your resignation or inability to act as Trustee, the Trust provides for a successor Trustee to take over the management of the Trust and provides for the management and ultimate distribution to the designated beneficiaries. Although the Living Trust takes the place of a traditional Will, it is normally prepared with an auxiliary "Pour-Over" Will. The "Pour-Over" Will merely assures that any asset in the settlor's sole name and not held by the Trust at the time of death will be collected by the Will and "poured over" into the Trust for disposition under the terms of the Trust.

A Living Trust is generally revocable in nature, though an Irrevocable Trust is frequently used as an estate planning tool to remove assets, such as life insurance, from the estate of the settlor. A Trust is optional for estates falling below the estate tax exclusion for federal estate tax purposes, but it is often recommended for probate avoidance alone where the asset picture suggests a probate estate will likely result upon death.

Federal Estate Tax: The federal estate tax is generally 40%.  As of January 1, 2018, the amount excluded from tax is $11.2 million for an individual and, under certain circumstances, $22.4 million for a married couple, indexed for inflation and reduced by the amount of any lifetime taxable gifts made.  There is generally an unlimited exclusion for transfers between spouses.

Gift Tax: The gift tax rate is 40% and as of January 1, 2018 the gift tax applicable exclusion amount is $11.2 million per donor (or $22.4 million for married couples), indexed for inflation.  As of 2018, an individual can give $15,000 per year to unlimited individuals without filing a gift tax return or having the amounts added to the total of liftetime gifts.

GST Tax: For transfers to grandchildren or more remote descendants, transfers to other related individuals assigned to the generation of a grandchild or more remote descendant with respect to a donor or unrelated individuals who are more than 37 1/2 years young than the donor, the GST tax rate is 40%.  As of January 1, 2018 the GST tax exemption is $5.6 million, indexed for inflation.

2018 Inflation Adjustments: Under the Internal Revenue Code, certain exclusions and thresholds are subject to annual inflation adjustments.  For 2018, the gift tax annual exclusion increased to $15,000 per donee and increased to $152,000 in the case of gifts made to a non-citizen spouse.  In addition, the threshold at which gifts received from foreign partnerships and corporations become reportable to the IRS was $16,111, and the threshold over which gifts from foreign individuals and estates are reportable was $100,000.  Always speak to an attorney or accountant when considering tax implications of any estate planning.

Indiana Inheritance Tax REPEALED: The Indiana state tax on an individual heir's share of assets received from residents of Indiana who die after December 31, 2012 has ended.

Out of State Property: Generally personal property owned by decedent who were residents of Indiana will not be subject to inheritance tax even if it is located out of state.  Real estate owned out of state by an Indiana decedent may be subject to inheritance tax and probate pursuant to the laws of the state where the property is located.  It is important to apprise your advisors of where your assets are located.

Fiduciary Income Tax: Between the time someone dies and assets are distributed, an estate, trust or decedent may still earn income that is subject to income tax.  Various distributions to heirs or beneficiaries may also be subject to income tax.  Examples may be IRA or 401k distributions.  These assets often were not taxed when earned and therefore may be subject to income tax when distributed.  It often helps your advisors to have hte last several years of income taxes that the decedent filed.

Checklist

  • Wills
  • Trust
  • Living Will
  • Health Care Durable Power of Attorney
  • Durable Power of Attorney
  • Medicaid Issues
  • Long Term Nursing Care
  • Funeral Trusts
  • Anatomical Gifts
  • Federal Estate Tax Issues
  • Intestacy, Spousal Rights, Prenuptial Agreements
  • Wallet Card, Document Binder, Fireproof Safekeeping of Documents

Intestacy (no will), Spousal Rights, Elections Against a Will, and Prenuptial Agreements

It is important to discuss these issues with your attorney. These are complicated, ever-changing areas of law. No decision should be made without consultation with an attorney. Some common questions are:

What if there is no Will? The law has a formula to distribute your assets if you do not have a Will. There are specific rules with regard to spouses concerning what they receive. There are separate statutes defining the share of a second, childless spouse.


What if a spouse does not like the Will? The law provides a spouse can elect to take a spousal share against the Will if the spouse does not agree with the Will even if the Will is valid in all other ways. This share changes depending on factors, including the existence of children and whether it was a second marriage.


Can I protect my assets with a Prenuptial Agreement? Yes. A Prenuptial Agreement can prevent a spouse from exercising normal statutory benefits. Each person planning a marriage should have separate counsel. Prenuptial Agreements are common with second marriages, especially when each individual has children from a prior marriage. Such agreements do not necessarily change the requirements to be eligible for Medicaid.

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