Speaker: Kim MCGarritt - Topic Estate Planning Kim is an attorney, and CPA. Kim noted that in regards to applicants that are married and have minor children, if no will exists, the state of Maryland will award 1/2 of the estate to the surviving spouse, and the other 1/2 to the minor children. A trustee will be appointed to oversee the property until the children reach legal age. Legally, children can own, but not manage property. In the state of Maryland, married applicants, with adult children, if they die intestate, the state awards 15K to the surviving spouse, then the rest of the assets are divided. The spouse will get 1/2 of the remainder, with the other 1/2 to be split equally between the adult children. In the State of Maryland, married and childless applicants, if they die intestate, and have surviving parents, the estate is divided equally between the surviving spouse, and the parents. Gross Estates An irrevocable life insurance trust can help reduce the gross estate tax. Generally, now an applicants 401K, or retirement income is their largest asset. Problems can arise, if the bene information has not been properly set up. Income, irrespective of decedent, is immediately taxable-the first 85K at 39.6%. With regards to a family business, non-liquid estates, or large property holdings, the Federal tax benefit has been changed (starting in 2006), from taxable at 675k, to 1.3M. As the law stands today, in 2010, there will be no Federal Estate Tax, but Congress will probably change this. Questions from the Floor: Q- Is is better to have a trust than a will? A- Depends. Only if you have questions about asset management or property owned out of state. In the state of Maryland, a 5M estate, probate court costs 25K filing fee. To set up a trust, you would be charged about 23K currently. An individual may rather set up a testimentary trust in their will- which comes into effect death. Q- Do spouses get 100% deduction? A- No, in Maryland they have an inheritance tax. |