Continuing on our estate tax discussion from last month, there are a number of other reasons, besides minimizing estate tax, to consider whether to engage the services of an estate planning attorney:
- Without an estate plan, the State determines what happens to your property when you die.
- Without an estate plan, and in particular a trust, the transfer of your estate will require a probate except in the limited circumstance of what is referred to as a “small estate”. The probate process can be expensive and time consuming. For example, an estate of $2 million, well under the 2012 $5.12 million threshold in the IRS study, would incur attorneys’ fees set by statute of approximately $40,000.00.
- Without an estate plan (which would typically include powers of attorney and healthcare directives), should you become ill or incapacitated, your loved ones could not easily step in to take care of health and/other decisions and needs.
So the next time the question of an estate plan comes up and you think to yourself, I have “nothing”, I do not need a plan, do yourself a favor and reconsider.
Posted in Estate Planning
Tagged Anker Hymes, Anker Reed, Estate Plan, Estate Planning Attorney, Estate Planning Law Firm, Estate Planning Lawyer, Estate Tax, healthcare directives, Los Angeles, power of attorney, Woodland Hills
Source: IRS, Statistics of Income, August 2013
The IRS recently released a statistical report entitled “Estate Tax Returns filed for Wealthy Decedents, 2003-2012”. Some of the more interesting statistics in the data collected were:
- The number of estate tax returns declined 87 percent from about 73,100 in 2003 to about 9,400 in 2012 primarily due to the gradual increase in the filing threshold.
- The gross estate filing threshold was $5.12 million in 2012, up from $1.0 million in 2003.
- In 2012, the total net estate tax reported on all estate tax returns filed for the year was $8.5 billion.
- California had the highest number of estate tax returns filed in 2012, followed by Florida, New York, Texas, and Illinois.
- Estate tax decedents with total assets of $20 million or more held a greater share of their portfolio in stocks (about 40 percent) and lesser shares in real estate and retirement assets than decedents in other total asset categories
Does the significant decline in the number of estate tax returns (due to the threshold for such returns increasing to $5.12 million in 2012 from $1 million) mean that only the “wealthy” (i.e. those with estates in excess of $5.12 million based on the 2012 threshold), need to be concerned about an estate plan and the avoidance or minimization of estate taxes? Absolutely not.
While the avoidance and/or minimization of estate taxes is certainly one good reason to engage the services of an estate planning attorney, there are a number of other reasons to consider which will be discussed in part 2 of this blog series.
Posted in Estate Planning
Tagged California, Estate Planning, Estate Planning Attorney, Estate Planning Law Firm, Estate Planning Lawyer, Estate Tax, estate tax report, estate tax return, Estate Tax Returns, Estate Taxes, Los Angeles, Woodland Hills