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Calculating Values for Estate Planning

Calculating Values for Estate Planning

Along with the New Year you may have some resolutions to keep your financial life in order, which includes how your finances will be handled after death. One step to organizing your financial life is Estate Planning. Before you can plan how to distribute your assets after your death, you need to understand what your estate is. In short, your estate is all your possessions. And understanding what your estate is, you also need to know what your estate is worth.

First you make a list of positive balance items such as:

Federal Laws Help Ease Tax Burden in Estate Planning

The federal tax system includes a gift tax, generation skipping transfer tax (GSTT), and estate (death) tax that work together to make as much of your estate as possible disappear. The laws and rules for these three federal taxes can be somewhat confusing and you might seek the counsel of an accountant and your attorney to help make sense of these taxes:

Estate Planning with Homestead Statutes in Mind

Who wouldn’t want their home to be protected after they die? Some states have homestead allowance statutes to make sure that your spouse and any minor children have a place to live after you die. Your homestead is typically defined as your house and may also include a certain amount of adjacent land. Homestead exemption statutes are closely related to homestead allowance statutes, and apply if your estate needs to pay debts you owe to creditors. If not enough cash is available, the estate is forced to sell off property - real, personal, or perhaps both - to get enough money to pay the creditors. If your estate owes a lot of money for debts, selling off a single high-value item, such as your house, is often easier, rather than trying to sell a lot of smaller items. Homestead exemption statutes are intended to prevent your surviving spouse and minor children from being kicked out of your home if property does need to be sold to pay creditors.

by Staff Writer
Published January 11, 2010
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