Estate Planning can be quite involved. This section will touch on some of the highlights of good Estate Planning and is designed to provide you with a general understanding of the steps you need to take.

1. Avoiding Or Reducing The Cost of Probate

Probate is the process that:

• Identifies the assets and liabilities of the deceased
• Provides valuations of assets and liabilities
• Pays debts and taxes
• Proves that the will of the deceased is valid
• Distributes the property of the deceased

Tips to reduce the cost of probate include keeping good records of your assets and liabilities , staying current with debts, employing a good attorney to prepare a proper will (if there is an invalid will, a will with invalid clauses, or a will that is not clear, your estate could likely incur a considerable expense remedying this situation).

If you wish to avoid probate, you may consider a Revocable Living Trust (RLT). An RLT can simplify the settling of an estate and potentially reduce legal and administrative fees.

2. Reducing The Cost Of Administering Your Estate

Providing for adequate liquidity will provide the executor with the ability to administer your affairs without having to liquidate assets at potentially unfavorable rates.

3. Consider Life Insurance To Pay Taxes

Any estate plan involving life insurance to pay for taxes should be carefully studied to be sure that the cost of the insurance is clearly presented and a decision made that it is worthwhile to pay this cost. (In the case of closely-held businesses, even though there are provisions in the tax code for extended payment of estate taxes, the use of life insurance may be clearly justified. This may also be true for wealth replacement in regards to a charitable remainder trust.)

4. Consider The Use Of Trusts To Save Taxes

Using the various trusts available under State and Federal law can easily result in considerable tax saving, while protecting the interest of a spouse and/or children.

It is beyond the scope of this listing of planning tips to explain all trusts, but the use of a Credit-Shelter Trust can easily save estate taxes in the amount of several hundred thousand dollars. Your planner can help you with this issue.

5. Consider The Use of Trusts To Manage Money

Could you have wisely handled $500,000 when you were 18? How about 25? Obviously, the age at which people can effectively manage money varies greatly. You can establish trusts to hold and manage the proceeds of insurance and estate distributions until your heirs attain an age at which they are competent to receive and maintain the proceeds.

6. Take Advantage Of Gifting

Make use of gifting on a regular basis if you have a large estate. A common misconception is that you can’t give more than $10,000 per year ($20,000 for a couple) to any one donee. This is not true. You can give more than $10,000 per year and doing so may be a good planning move. Of course, giving more than $10,000 may result in estate taxes at your death, but it is likely that you would have incurred those taxes anyway.

7. Have your wills revised and updated on a regular basis

Having an updated will eases the administration of your estate.