Wills With Disclaimer Trusts – Flexible Tax Planning Tool

How To Make a Living Will

You put your house in order when you write your Will. Your chosen beneficiaries will find that their inheritance will be received quickly and just as you intended. But are you uncertain about how go about drafting your Will? This article gives you the different ways that you can go about getting this job done. It might save you time, hassle and even some money! So read on to find out the insider tricks to writing your Will.

The Disclaimer Will is a standard Will with a trust provision that a surviving spouse can elect to utilize if the surviving spouse believes that his or her estate could be subject to federal estate tax upon his or her death. The Disclaimer Will typically provides for an outright marital deduction bequest of the entire residuary estate to the surviving spouse, and will further provide that if the surviving spouse wishes to disclaim the bequest (in whole or in part), the disclaimed property will be passed into a trust for the benefit of the surviving spouse. The trust will shelter the exemption equivalent of .5 million (for 2009) or million (in 2011) from estate tax. This can lead to a huge estate tax savings.

For example, assume Harry and Wendy are a married couple with two children. Their combined estate is .5 million. In 2011, if Harry dies before Wendy, without a Disclaimer Will, Wendy will have an estate of .5 million (there is no federal estate tax for transfers between spouses). Upon Wendy’s death, assuming her Will distributes her entire estate to her children, million will pass to the children tax-free through her lifetime exemption. The remaining 0,000.0, the amount exceeding her exemption limit, will be subject to federal estate tax. Assuming a tax rate of 55% on that amount, the estate would be responsible for paying 5,000.00 in federal estate taxes. Therefore, the net estate passing to the children is ,225,000.00.

Most people would first think about using a solicitor when wanting to get their Will made. This is because they have been the first choice for many generations. Also, you tend to think of going to a solicitor whenever you want anything legal preparing. You get professional service, and, hopefully, good legal advice. You also get to speak to someone who can answer all of your concerns and queries and who will create a document that perfectly fits your own particular circumstances. This can be very reassuring. However, it can be a little intimidating to go to a lawyer and is obviously inconvenient because you have to take time out to get there. There is also the question of cost to consider. Lawyers are not cheap.

Your personal representative will have your estate appraised, pay taxes accordingly, review and pay any valid debts you might have left, collect any amounts owed to you, pay your funeral expenses and distribute the remaining assets to the persons named in your will. With a will, you can truly rest in peace

Resource Author Francisco Rodriguez H.
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