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The daily operations of a car dealership require nearly all your available time and energy. You know that long term planning is important, and you intend to address it someday, but you never seem to have the time. If you and your family are to enjoy all the fruits of your labor, you must make the time for long term planning. Below are several important estate and asset planning questions and answers you should consider now. 1. Due to the change in federal estate tax laws, what estate planning opportunities should I consider now? With the increased gift tax exemption of $5 million in 2011 and 2012, now is the time to make large gifts. Gifting now would freeze the value of the gifted property and would remove postgift appreciation and income from your (potentially taxable) estate. If you have a business or property that you want to pass to family, you may be able to apply valuation discounts in order to maximize your gift: these valuation discounts may not be available for intra-family gifts in the future. Also, there is no Washington state gift tax. Therefore, lifetime gifts by Washington residents are not subject to a state gift tax and will escape the Washington estate tax. Take advantage of the current estate tax laws by looking at your gifting plan now.
By Kari Brotherton, Lance Losey and Nancy Kennedy Ryan, Swanson & Cleveland, PLLC
2. My neighbor tells me I need a Living Trust. I have a Will. Am I missing something? Living Trusts are frequently used in place of a Last Will as the primary means of transferring assets at death. They have unique qualities that make them an attractive alternative for certain individuals. In comparison to Wills, Living Trusts are more private and allow the estate to pass without probate if correctly implemented, among other qualities. However, Living Trusts also are more complex to create, require more maintenance, and can often fail to avoid probate if neglected. Don’t accept your neighbor’s word you are missing out, but do have a conversation with a qualified estate planning lawyer to judge for yourself whether a Living Trust meets your needs. 3. Why should I consider appointing a professional trustee to manage the trust for my children? Aren’t trust companies too expensive? A professional trust company may well be worth its fees. Consider the following reasons why it may not be best to appoint a family member: First, by serving as trustee, your family member is exposed to liability for which he or she has no training. Secondly, the relationship between your family member and the trust beneficiaries may be stressed by the financial entanglement created by the trust. Finally, if the trustee does fail in some respect, would you rather have your children seek legal redress from their relative or from a licensed and insured professional? Make the best choice for your family, but don’t dismiss professional fiduciaries out of hand.
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