Provided by the Law Offices of RICHARD
MAYBERRY
MAYBERRY LAW FIRM
2010 Corporate Ridge
McLean, VA 22102
(703)714-1554
Committed to providing the highest quality estate planning legal
services for individuals, families and businesses
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Wasn’t it just yesterday that you were turning to your parents for
advice regarding school, steadies, matrimony and mortgages? Now they
are or will be facing some tough decisions about their Life &
Estate Planning…and they could use your help. Use this article to
help you help them.
According to Benjamin Franklin, there are
only two certainties in life: “death and taxes.” Fact #1: Everyone
who is born will eventually die and some of us will even become
disabled along the way, spending our life’s savings on nursing home
expenses. Fact #2: Death taxes, with marginal rates ranging between
37% and 55%, can confiscate a significant portion of ones hard-earned
assets. While proper Life & Estate Planning cannot alter these
facts, it can help your parents control the impact these facts may
have on themselves, their loved ones and their hard-earned assets.
Disability
& Death
If an
accident or an illness leaves your parents legally disabled, then
their personal, health care and financial decisions will need to be
made for them. In the absence of proper Life & Estate Planning,
your parents (and you) may be subject to the jurisdiction of the
Probate Court. Typically, the Probate Court process employs three or
more lawyers, may cost several thousand dollars and may expose the
personal and financial condition of your parents to the public,
placing them under the supervision of a Judge who likely is a stranger
to your family. Alternatively, proper Life & Estate Planning may
avoid all this, empowering your parents to legally appoint the
decision-makers they know and trust to make their decisions during any
period of disability.
If your
parents cannot perform recognized Activities of Daily Living (e.g.
bathing, continence, dressing, eating, toileting and transferring),
how will they pay for professional assistance? The failure to make
proper plans now for Long-Term Care needs later can be hazardous to
their wealth.
The death of a parent can leave heirs better
or bitter. Better in that they may celebrate a life well-lived. Bitter
in that they may fight over the worldly possessions left behind,
potentially wounding family relationships for generations. In the
absence of proper Life & Estate Planning, the seeds of bitterness
may find fertile soil to be sown and grown. Consider the findings of a
recent study of Americans age 50 and over regarding Family Fall-Outs
due to an inheritance (or lack thereof).* Over 20% of the respondents
reported problems among their surviving family members due to an
inheritance. Of those respondents reporting no conflicts, the majority
said they had known what to expect ahead of time and
the vast majority of them
believed their inheritance was fair. The value of proper planning and
prior communication cannot be overemphasized in preserving family
harmony.
Death
Taxes
As
responsible citizens, your parents probably believe that everyone
should pay their fair share in taxes to support the legitimate
operations of the federal government. Although most responsible
citizens feel the same way, few believe any citizen should pay more
than they legally owe in taxes. Ironically, many of these same
responsible taxpayers are facing unnecessary Death Taxes on the value
of their life’s work at marginal rates ranging from 37% to 55%.
If your parents want a significant portion of
their wealth taken by the IRS and redistributed to strangers by
politicians in Washington, D.C., then the subject of Death Taxes may
be of little interest to them. On the other hand, if your parents
would rather minimize the impact of Death Taxes on their wealth and
use it to benefit the loved ones/charities of their own selection,
then proper Life & Estate Planning is critical. For example, a
married couple with a $1.35 million estate may shelter their entire
estate from Death Taxes by a
properly designed, implemented
and maintained Life & Estate Plan. In the absence of such
planning, the same couple may lose in excess of $200,000 to
unnecessary Death Taxes.
Summary
This
has been a brief, general overview of an extremely complex topic. As
always, qualified legal counsel should be sought to evaluate the
planning options appropriate for your parents.
*Survey
by AARP/Scudder Investment Program
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