l e g a l e a g l e s
Post-Marital Estate Planning b y K i m b e r l y Wa t s o n S e w e l l a n d F r a n k l i n H . Wa t s o n
Choosing Guardians Do you have minor children (i.e., under age 18 in most states)? If yes, you probably invest considerable time and treasure to provide them with a moral, safe and secure home environment. What if you die while they are still minors? Who will rear them to adulthood? Who will provide the moral, safe and secure home environment? Unless you want a Probate Judge to make the selection for you, proper Life and Estate Planning is required. Who will manage the inheritance you leave for your minor children until they reach adulthood? Again, that decision will be made by a Probate Judge in the absence of proper Life and Estate Planning by you. What if you have minor children, but are divorced or never married? Absent a showing of unfitness, the Probate Court will appoint the surviving biological parent not only to rear the children to adulthood, but also to manage their inheritance. Additionally, if the surviving biological parent then survives your children, they ultimately may receive your child/children’s’ inheritance, which might not be what you would prefer to take place. Distributing Mementoes Is family harmony important to you? Whether it is grandma’s yellow pie pan, antique furniture or that Civil War sword, such items should be identified in your Life and Estate Plan along with the designated recipient of your own selection. Otherwise, your valuables could end up in the hands of the wrong loved one or sold to a perfect stranger in your Estate Sale Either way, relationships between and among your loved ones could be bruised or battered unnecessarily. Estate and Gift Taxes Benjamin Franklin noted that there are only two certainties in life: Death and Taxes. While there is little we can do to avoid the former, proper estate tax planning can minimize the latter. One of the best kept secrets for reducing Federal Estate Taxes is giving while you are living. Such giving leverages the Annual Gift Exclusion (AGE) that is available to every taxpayer. Under the AGE, each taxpayer may give $14,000.00 each year to as many people as they wish. This wealth transfer does not trigger gift taxes to the donor or to the donee. Additionally, any future increase in the value of the gifted asset is not included in the donor’s estate for determining Federal Estate Taxes later. For this reason, gifts of appreciated assets (e.g., stock that is rapidly going up in value) are popular. [Note: legal counsel should be sought before making AGE gifts.]
Are your likely beneficiaries young, inexperienced, or perhaps irresponsible? If so, various Trusts can be created to protect your AGE gifts from their potential divorces, lawsuits, bankruptcies, or good, old-fashioned squandering. Through carefully drafted Trusts you can control how and when the gifted assets are made available to your beneficiaries. As legendary jurist Oliver Wendell Holmes put it: Put not your trust in money but put your money in trust. ASK YOURSELF... These Questions Regarding “Estate Planning for Singles.” • Were I incapacitated due to an injury or illness, would I or my assets be subject to the Probate Court? • Were I to die leaving minor children, have I legally appointed at least one Guardian (i.e., Bank-Up Parent) for them and someone I trust to administer their inheritance? • Were I to die, have I legally designated who will receive various valuable (or sentimental) items of tangible personal property from my estate, to avoid conflicts among loved ones? • Were I to die, have I made arrangements to protect the inheritance for my children from their potential divorces, lawsuits, bankruptcies or squandering? One of the best kept secrets for reducing Federal Estate Taxes is giving while you are living. Such giving leverages the Annual Gift Exclusion (AGE) that is available to every taxpayer.
Kimberly Watson Sewell and Frank Watson
I f you are single, you are in good company. Nearly half of all adult Americans are single. Being single can mean considerable personal and economic free- dom. Nevertheless, just like your married counterparts, proper Life and Estate Planning is necessary to keep you in control. Disability Planning Every adult American is responsible for making his or her own personal, health care and financial decisions. In fact, you may take many basic decisions for granted. For example, you decide where to live, what medical care is appropriate and how to manage your finances. But what if an illness or injury leaves you unable to make even these basic decisions? Who will make such decisions for you? Who will have your best interests at heart? Proper Life and Estate Planning is required in advance of your incapacity if you want to appoint your own decision-maker. Otherwise, by default you may find yourself in the Probate Court in a legal process that typically employs three lawyers and makes your private, personal, health care and financial circumstances a matter of public record.
Frank Watson has been conducting real estate closings along 30A since 1997. For more information, please contact: Watson Sewell, PL (850) 231-3465 www.watsonsewell.com
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