A Look At Estate Planning by ParmanLawOK

VIEWS: 22 PAGES: 7

Majority of American adults are going through life without a properly executed estate plan. Many people don't even know exactly what estate planning is, or why is it important

More Info
									 A LOOK AT
ESTATE PLANNING
Majority of American Adults Are Going Through
 Life Without A Properly Executed Estate Plan.
  Many People Don't Even Know Exactly What
  Estate Planning Is, Or Why It Is Important.




                By Larry Parman
         OKLAHOMA ESTATE PLANNING ATTORNEY
        According to surveys, the majority of American adults are going through life
        without a properly executed estate plan. Many people don't even know exactly
        what estate planning is, or why it is important.

        Everyone is going to pass away someday. This may not be the most pleasant
        subject to contemplate, but it is simply a fact of life. You must prepare for this
        inevitability in advance, and it requires the execution of certain legally binding
        documents.

        VEHICLES OF ASSET TRANSFER

        Estate planning involves arranging for the transfer of your financial assets after
        you pass away. There are numerous different ways to get assets into the hands of
        your loved ones. The best course of action is going to vary on a case-by-case
        basis depending on your unique personal situation.




        LAST WILLS




A Look at Estate Planning                     www.ParmanLaw.com                              2
        The most commonly used asset transfer vehicle is the last will or last will and
        testament. In this estate planning document you record your wishes regarding
        the transfer of your property. You also name an executor or executrix who will be
        in charge of handling the business of the estate.

        If you are a parent of a dependent child you would want to nominate a potential
        guardian when you create a last will. This individual would care for the child if
        both parents were to pass away.

        REVOCABLE LIVING TRUSTS

        An alternative to a last will as a vehicle of asset transfer is a revocable living
        trust. With these trusts you name a trustee to administer the trust after you die.
                                               You can name an individual, but many
                                               people prefer to use a bank or a trust
                                               company.

                                               The trustee that you select distributes
                                               assets to the beneficiary or beneficiaries
                                               that you name in the trust agreement. You
                                               decide on the nature of these distributions
                                               when you are drawing up the trust.

        Many people think that trusts are only for wealthy individuals. In fact, revocable
        living trusts do not address many of the concerns that wealthy people have. This
        type of trust is utilized to enable the transfer of assets outside of the probate
        process.

        Probate is the legal process of the estate administration. It takes place under the
        supervision of the probate court. Probate avoidance is appealing because
        probate is time-consuming, it can be costly, as it is a public proceeding.



A Look at Estate Planning                     www.ParmanLaw.com                               3
        ESTATE TAX EFFICIENCY

        We have a federal estate tax in the United States, and it can reduce the value of
        your wealth considerably as it is being passed on to your heirs. At the present
        time the maximum rate of the federal estate tax is 40 percent.

        The amount of the estate tax exclusion in 2014 is $5.34 million. The portion of
        your wealth that exceeds $5.34 million in value would potentially be subject to
        the federal estate tax.

        Estate planning can involve positioning your assets in a tax efficient manner so
        that your estate tax exposure is mitigated.

        ASSET PROTECTION




        Estate planning can include efforts to protect assets from creditors and
        claimants. There are various different ways of accomplishing this goal. The
        creation of a family limited partnership can be a way to protect assets. Limited
        liability companies are also used for asset protection.




A Look at Estate Planning                     www.ParmanLaw.com                             4
        SPECIAL CIRCUMSTANCES

        Your family dynamic will play a role when you are planning your estate. For
        example, if you have a person with a disability who is receiving government
        benefits on your inheritance list you must tread lightly. A direct inheritance
        could lead to the forfeiture of these benefits.

        This type of situation is addressed through the creation of a supplemental or
        special needs trust.

        There is also the matter of a spendthrift heir. You may have someone in the
        family who is prone to burning through money quickly. He or she may squander
        a direct inheritance in short order.

        You can protect a poor money manager from his or her own bad decisions by
        making this individual the beneficiary of a spendthrift trust. The trustee would
        handle the assets, and the beneficiary would have no control over them.
        Measured distributions would be made to the beneficiary in accordance with
        your wishes.

        These      are      a    couple   of
        examples            of       special
        circumstances, but there are
        others.

        INCAPACITY PLANNING

        Arranging for the transfer of
        your financial assets is at the
        root of estate planning. However, it also involves preparing for the twilight years
        that will precede your death.




A Look at Estate Planning                      www.ParmanLaw.com                              5
        Incapacity is possible. You can prepare for this eventuality by empowering
        decision-makers to handle your affairs in the event of your incapacitation. This
        is done through the execution of documents called durable powers of attorney.

        You should also execute a living will stating your preferences regarding the use
        of life sustaining measures.

        CONCLUSION

        All responsible adults should work with a licensed estate planning attorney to
        create a comprehensive estate plan. If you do nothing your family would be left
        behind to deal with the aftermath. Negative consequences could arise, and they
        can be easily avoided if you plan ahead appropriately with the benefit of legal
        counsel.



        REFERENCES


        Forbes
        http://www.forbes.com/sites/janetnovack/2012/10/14/the-forbes-guide-to-
        estate-planning/

        American Bar Association
        http://www.americanbar.org/groups/real_property_trust_estate/resources/est
        ate_planning.html




A Look at Estate Planning                   www.ParmanLaw.com                              6
        About the Author
        Larry Parman

                                    After helping his own family deal with a lengthy probate and a battle with
                                    the IRS following his father’s death in a farm accident, Larry made a
                                    decision to help families create effective estate plans designed to reduce
                                    taxes, and minimize legal interference with the transfer of assets to one’s
                                    heirs, and protect his clients’ assets from predators and creditors.
                                    Following a dozen years in the investment banking and financial services
                                    business, in the mid-1980s Mr. Parman formed a law firm that gives
                                    families the peace of mind that comes from having created a premier
                                    estate and financial plan.

                                      After forming his law firm in 1984, he offered a series of public and
                                      private seminars to inform the public about using a Living Trust as the
        foundation of a family’s estate plan. Today, Parman & Easterday is one of the leading business and
        estate planning law firms in the Midwest. The firm’s primary focus is on business and estate planning,
        elder law, asset protection, and providing effective estate planning solutions for clients. Today, the
        firm’s premier estate plan design is referred to as a Legacy Wealth Plan.

        Mr. Parman is a frequent guest on the radio and can be seen on television talk shows explaining the
        importance of proper estate planning. Prosperity Productions selected Mr. Parman as a featured
        speaker in a nationally-recognized educational video on Living Trusts. He is the author of numerous
        published articles on financial and estate planning matters and the co-author of two books, Estate
        Planning Basics: A Crash Course in Safeguarding Your Legacy and Guiding Those Left Behind in
        Oklahoma: Settling the Affairs of Your Loved Ones.

        Mr. Parman is a member and Fellow of the American Academy of Estate Planning Attorneys. He is also
        a member of the Oklahoma and Missouri Bar Associations, the American Bar Association, and the
        Oklahoma City Estate Planning Council.




                                         www.ParmanLaw.com
              OVERLAND PARK, KS                                 OKLAHOMA CITY, OK
              10740 Nall Avenue, Suite 160                      13913-B Quail Pointe Drive
              Overland Park, KS 66211                           Oklahoma City, OK 73134
              Phone: (913) 385-9400                             Phone: (405) 843-6100
              Fax: (913) 385-9422                               Fax: (405) 917-7018

A Look at Estate Planning                             www.ParmanLaw.com                                           7

								
To top