Page 2 - Wellspring Legacy Giving Society News
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ESTATE PLANNING
Estate planning is all about ensuring
that your wishes are fulfilled
Without a plan, settling your affairs may have a prolonged
and costly impact on your loved ones
An estate plan provides a road map for your Will
executors (the people or trust companies you name
in your Will) to carry out your wishes after you die. This is the backbone of your estate plan and should
Estate planning is an ongoing process where you be drafted by a lawyer specializing in Wills and
organize your affairs and formalize your wishes estates. They will guide you through the process and
through legal documentation outlining how your ensure that your Will names your executor(s), who will
estate will be managed and disbursed. ensure that your wishes are carried out as stated in
your Will. If you have minor children, you will name
It is imperative to seek the appropriate professional a guardian. Your Will instructs your executor(s) to
advice in preparing your estate plan. Depending inventory your assets, pay your debts and taxes and
on the complexity of your estate, you may require then disburse the remaining assets (the residue) to
several professionals, including an estate lawyer, your chosen beneficiaries.
accountant, tax advisor, charitable gift planner,
financial advisor, insurance agent or trust company There may be an opportunity for tax savings if your
executor. At minimum, you should speak to an estate Will allows your estate to exist for at least three years
lawyer. after your death and before the disbursement of
assets. Your estate can benefit from lower, graduated
While each estate plan is unique to the individual, income tax rates during this period. Ultimately, there
certain common elements should be addressed: are various options for disbursing the residue, such
as transferring the balance to a spouse, moving a
portion into a trust for minors or disabled family
members or fulfilling a charitable gift.
Estimate of Tax on Death and Liquidity
Upon death, you are generally deemed to dispose
of all of your assets at fair market value, which can
result in a significant tax bill. An exception to this rule
is assets passing to your spouse (they can transfer at
cost). Also important to note is the availability of the
principal residence exemption, which may shelter all
tax on your principal residence.
If you own private corporations, careful consideration
must be given to pre/post-mortem planning as, if not
addressed properly, there could be double taxation.
It is best to work with an accountant or tax advisor to
estimate taxes that will be due to ensure your estate
has enough liquidity to pay the tax and any debts, and
to understand the net residual assets that will be left
for the beneficiaries of your estate.
