Wednesday January 25, 2012
At the end of December I met with a couple who had wills that were done in another state in the early 1990s and realized that it was about time to update them. As part of every first meeting that I have with new clients (regardless of whether or not they already have wills or trusts since it seems that even if they do, they really do not understand even the most basic estate planning concepts), I educate them on the following seven estate planning topics:
- Estate planning is about more than planning for what happens after they die;
- An overview of estate taxes, gift taxes, generation-skipping transfer taxes and income taxes that affect an estate;
- How their property is titled dictates who will get what and if probate will be necessary;
- All about the probate process;
- The fundamentals of revocable living trusts;
- How to protect their beneficiaries from themselves and outside influences; and
- Estate planning is an ongoing, lifelong process.
A few hours after the meeting with these particular clients I received an email from the wife which said the following: "Thank you for the meeting today, it was certainly an eye opener!"
I really take this as a compliment since I believe it is just as important to educate clients about estate planning as it is to put their estate plan together.
So what about you? Was your first meeting with your estate planning attorney an eye opener?
Tuesday January 24, 2012
Effective January 1, 2012, California has new thresholds with regard to "small" probate estates:
- Formal probate proceedings need to be initiated for California decedents when the total value of the real and personal property in the estate exceeds $150,000. The former threshold was $100,000.
- For estates that own real estate, the threshold for filing California Judicial Council Form DE-305, Affidavit Re: Real Property of Small Value, has been increased from $20,000 to $50,000.
Read the text of California AB 1305: Huber. Decedents' estates: smaller estates.
Monday January 23, 2012
In his State of the State address on January 12, Nebraska Governor Dave Heineman threw his support behind reductions in the state income tax coupled with complete repeal of the state inheritance tax. Nebraska currently has the second lowest unemployment rate in the country at 4.1% and is one of two states that has a balanced budget and cash reserves, so Governor Heineman thinks that the state can afford these changes. According to Heineman, "Last year, in calendar year 2011, net state tax receipts grew by $349 million -- our economy is growing. It is growing more than the tax relief I'm proposing."
But not everyone is happy about the governor's tax cut proposals, particularly many officials from Nebraska's 93 counties, which are the benefactors of the inheritance tax proceeds. In 2007 - 2008, the most recent year that statistics are available, Nebraska counties raked in nearly $42 million from the inheritance tax, and several county officials voiced their fear that the elimination of the inheritance tax would force counties to raise their property taxes.
Governor Heineman anticipated push back from the counties, stating in his speech, "I know you'll hear from county officials, but this is about good tax policy and completing the elimination of the death tax." While Nebraska repealed its state estate tax in 2007, it is one of seven states that currently collect a state inheritance tax.
Wednesday January 18, 2012
The Massachusetts legislature has delayed the implementation of its Uniform Probate Code until March 31, 2012. The new law was supposed to take effect back on January 2. For more information about the new law, refer to Changes Are Coming to Massachusetts Probate Laws.
The legislature is also considering a bill that would implement a uniform trust code, so stay tuned for updates.
