Estate Planning

Contents:

Estate Planning
Recommended Steps
Who Needs Estate Planning
For More Information

Estate Planning

Estate planning is the process of arranging an individual's or married couple's individual and joint assets to be transferred in a manner that best carries out their personal goals while minimizing estate taxes and administration costs. There are numerous estate planning methods which can be used to carry out specific goals. Each planning method has advantages and disadvantages, therefore selection of the proper planning method depends upon an individual's family circumstances, estate size, and personal goals. Below are several recommended steps to begin the estate planning process.

Recommended Steps

Develop an accurate inventory of all assets including their value, type of ownership, and beneficiary designations on life insurance policies and retirement accounts.
Organize all legal documents such as wills, trusts, and power of attorney's.
Estimate the overall size of the estates to determine the extent of estate planning required. In 1999, estates valued at less than $650,000 are exempt from federal estate taxation unless the unified gift and estate tax credit has been reduced due to prior gifting. This amount increases gradually to $1 million in 2006.
Determine whether family members or assets require special protection (minor children, adults with special needs, family business).
Evaluate your future health care needs and determine how they will be funded.
Determine how financial and health care decisions will be made in case of illness or disability.
Evaluate estate planning options (wills, trusts, power of attorneys, insurance, gifting).
Develop and implement an estate plan that meets your individual goals.
Review your plan annually.

Who Needs Estate Planning

Generally all individuals regardless of the size of their estate should have the following documents: a will, durable power of attorney, and health care power of attorney. Additionally, if your estate exceeds $150,000 you should also consider insurance for long term care expenses. Several other estate planning methods commonly used for estates that currently exceed $650,000 or estates with special needs or goals include: revocable living trust, bypass trust, marital deduction trust, Q-TIP trust, charitable remainder trust, and gifting.

For More Information

For additional information, please contact Financial Dimensions, Inc. at 410-321-6060 ext. 150, or contact your own attorney or financial planner. Members of First Financial Federal Credit Union are entitled to a free, 1/2 hour financial planning session from Financial Dimensions.

Financial Dimensions, Inc.
In The First Financial Building
1215 York Road
Lutherville, MD 21093
Phone: 410-321-6060, ext. 150
Toll free outside Baltimore metro area: 1-800-90-FFFCU
Fax: 410-321-4492
E-Mail Financial Dimensions