Today, February 13, 2007, the current federal estate tax exemption is set at $2 million dollars. It means that people with less than $2 million dollars worth of assets can do their own planning. Contingent upon the complexity of one’s estate, number of heirs, varied assets, certain planning calls for an expert. But, for regular folks leaving money to their heirs, there are other ways to do your own estate planning, offset probate expenses and maximize inheritance:

1. First, visit your state’s web site to determine how much the estate tax exemption is set in your state.

Attorneys can be very useful in times of bereavement. Probate complexities can be overwhelming to a grieving survivor, and lawyers trained in dealing with such complexities can be instrumental in getting through such a time. Let’s explore the ways in which hiring a probate attorney can be beneficial to the family — even prior to passing on.

A lawyer can help in many ways when it comes to writing a will. If a person dies without a will (or dying “intestate”) in Florida, their assets are divided amongst their immediate family. If the deceased has a spouse and at least one child, the first $60,000 of their estate beyond homestead entitlements, plus 1/2 the remaining estate, will go their spouse. The remainder goes to their children. If they have a spouse but no children, the entire estate goes to the spouse.

1. California Law

This document discusses California law only. Each state has its own laws for dealing with wills, trusts and powers of attorney.

2. Durable Power of Attorney for Finances

a. Durable powers of attorney for finances allow someone else to handle your finances for you. They come in two basic types:

i. A “springing” durable power of attorney allows your agent to handle your financial affairs (such as paying bills) if you become incapacitated.

(1) If you regain capacity, your agent loses this power – unless and until you become incapacitated again.

A living will is also known as an advance directive, and it is a written document indicating a person’s wishes in the event that they are reduced to a vegetative state by some accident or trauma, and whether doctors treating them should go to all efforts necessary to keep them legally living, or to “allow nature to take its course”.

Did you know that your heirs may have to liquidate your home or rental properties immediately after your death, unless you create an Irrevocable Life Insurance Trust (ILIT)?

Most people are interested in passing their wealth to their heirs. With the demise of the baby-boomer generation, an enormous transfer of wealth will occur during the coming years. The government is poised to capture this wealth through the estate tax, which is imposed upon death.

Currently, the Federal estate tax exemption amount is $1.5 million for individuals and $3 million for married couples. Any amount over the exemption will be taxed (Federal estate taxes average around 45%). Furthermore, this tax must be paid within nine months after you die.

Louisiana law provides that without a will, separate property is inherited in a unique inheritance order unlike that in most other states. That order is somewhat complicated, and its unusual provisions often come as an unwelcome, devastating surprise to the surviving family.

If one is married but has no will, ones line of inheritance in Louisiana is the same as that of a single person. That is: Actual usage (usufruct) of funds and property are given to the parents of the deceased; the deceased’s siblings are granted naked ownership. If the deceased’s parents die first, then the siblings inherit full ownership with usage rights.

Question: I have my bank accounts (CD’s Savings etc) in the __________ Revocable Trust. My self and my friend are trustees. If I die, does the Trust “disappear” and are my accounts automatically distributed to the surviving trustee or will the trust as a taxable entity still exist? M.N.

Answer: Dear M.N. - The short answer to your question is, it depends upon what the trust instrument says.

Unfortunately, we often get caught up in the legal ramifications of a trust and lose track of the fact that it is nothing more than someone holding your property for the benefit of someone else.

The legal process of the distributing of the estate of a deceased individual is known as probate. Probate is often a time-consuming and confusing process for those who are involved. Most people lack a knowledge of the probate process because of inexperience with the process.

While probate is rarely easy, an adequate knowledge and understanding of the process can decrease stress, and increase your confidence that everything is being done properly. Anyone involved in probate should understand the following:

1 – In cases where a valid will exists, the individual named in the will as the executor is responsible to see that the deceased’s instructions are carried out.

A will is a written document which gives instructions how and to whom the will maker (testator) wants to bequeath his/her property after death. An oral will can be made only by members of military and merchant navy in active service when they don’t have time to execute a written will due to exceptional conditions like war.

Any person above 18 with sound mental health can make a will. It must be dated and signed by the testator and certain number of witnesses, depending on the laws of the state. A hand written will, called ‘holographic will’, valid in 25 states, does not require witnesses.

There comes a point in every person’s life where it is appropriate and prudent to begin planning for the post death division of property and assets. It is necessary to anticipate and plan for the quagmire that is probate. For many facing the task of planning their estate, the mere idea of paying an estate planning attorney can be painful and many simply choose to forego such a task by using cheap or free online forms. While choosing the easy way out may save you money now, it will cost your estate significantly more in the future. The pitfalls of cheap online wills and trusts writing programs are many.