MacDonald Law, P.C.MacDonald Law, P.C.2026-04-21T18:03:14Zhttps://www.macdonald-law.com/feed/atom/WordPress/wp-content/uploads/sites/1605295/2020/10/cropped-MacDonald_FAV-32x32.pngOn Behalf of MacDonald Law, P.C.<![CDATA[The federal tax exemption for your estate in 2022]]>https://www.macdonald-law.com/?p=472452022-08-08T04:26:01Z2022-05-03T07:47:03ZNew 2022 tax exemption
An estate tax exemption is the monetary value of a person's estate that is not subject to taxation by the federal government. In 2022, the amount of estate tax exemption is $12.06 million for single individuals and $24.12 million for married couples at the national level, and states may impose an additional tax.
Estate tax requirements
Creating an estate plan includes making provisions for federal estate taxes; however, there is no estate tax in Michigan. You only have to pay federal estate taxes for an estate in excess of $12.06 million. If the total value exceeds the exemption, you have to pay taxes for the excess.
One myth is that the average rate of a federal estate tax for taxable income is 40%. The tax rate increases as the taxable amount increases. The maximum rate is 40% for estates that exceed millions of dollars.
In 2021, the Build Back Better Act was passed to include an additional 5% surtax for millionaires and billionaires. In 2020, the federal estate tax produced $9.3 billion for the government.
Understanding estate tax laws
Every year, the federal laws for estate tax exemptions change. It's important to understand the basics of tax requirements for earning an income, donating gifts, owning property or transferring your estate in a will or trust.]]>On Behalf of MacDonald Law, P.C.<![CDATA[What you shouldn’t put in your Michigan will]]>https://www.macdonald-law.com/?p=472412022-08-08T04:26:34Z2022-04-18T22:22:03ZShould you list all of your assets in the will?
It’s important to list any assets and their beneficiaries in your will when they haven’t been listed anywhere else. But other assets might be immediately transferrable upon your death, which means there’s no need for you to list them in your estate plan.
Assets that are transferable upon your death would be bank accounts, investment accounts, retirement plans or life insurance policies. It is essential, however, that you name beneficiaries for these assets and update beneficiaries when circumstances change.
Should you list joint properties in your estate?
The short and sweet answer is no, you shouldn’t. Any properties that are jointly owned with another person will automatically go to the co-owner after your death.
Properties that you would jointly own or co-own with someone include things like your house, car, and certain accounts. Most often, you’ll own these with your spouse or business partner.
Can you add terms and conditions to your will?
Specific instructions about what assets should go to who are great for wills. However, adding conditions to the will probably won’t be able to be carried out.
For example, you can say that your goddaughter receives a family heirloom. But you can’t say that the goddaughter receives a family heirloom as long as she gets good grades – this would be better suited for a trust.
Why don’t I want to put these things in a will?
Listing these assets in your will can cause the asset to get dragged into probate court. This means the asset won’t be immediately available to your beneficiaries, making it an emotional and financial drain on your living relatives.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Why Does My Estate Need an Executor?]]>https://www.macdonald-law.com/?p=472372022-08-08T04:26:58Z2022-04-06T02:08:37ZWhat is an executor?
An executor is your personal representative who ensures that the contents of your will, representing your final wishes, are carried out. Executors oversee the estate from the time of your passing until probate is complete. Estate planning consists of designating your assets, like bank accounts, investments, personal items, cars, real estate and more, to specific heirs.
After your passing, your executor will manage and protect estate assets, pay debts and taxes and notify and transfer assets to heirs. Executors are needed for all estates, not just those with considerable assets. You must take care when selecting your executor to ensure your wishes are met. Certain people, such as minors or convicted felons, cannot serve as executors.
Spouses, children or grandchildren are typical choices, but the designated person should be someone you trust. If your estate is complicated, you may want to choose a company that professionally manages estates.
The executor's job can be difficult
Drafting a proper estate plan can protect your legacy and help your heirs avoid excessive probate issues. However, even in the best of circumstances, the executor's job can be drawn out and complicated. Discuss the tasks with your intended executor to make sure that they are willing to take on the job.
You can change executors, as well as estate plans, anytime during your life. What works one year may not work the next. Continue to periodically review your plans to ensure that they meet your needs.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Estate planning for high-net-worth individuals]]>https://www.macdonald-law.com/?p=472332022-08-08T04:27:20Z2022-03-23T05:57:58ZAppoint someone that you can trust
The first step of successful estate planning is to make sure to appoint an estate planner that you can trust. This is the person who will be in charge of seeing to your interests if you become disabled or pass away. The person you appoint should be someone with experience in estates and related legal matters.
There are a few key aspects that you will need to consider before you plan your estate. One of the most crucial will be to minimize your estate taxes. You will need to know your tax limits for such matters as gifts, estates, and generation-skipping. These change often, so it's good to keep up to speed on these issues.
Leave provisions in case you become disabled
You need to have a reliable plan in place for the distribution of your assets in Michigan. This will be even more important if you should become disabled and unable to speak for yourself. There are certain provisions that you will need to put in place before this occurs.
These include appointing someone with the power of attorney. You can also file a living will or establish a revocable trust. You will also need to consult with your estate planner to find the best way to avoid probate. The sooner you resolve these matters, the easier it will be to avoid complications.]]>On Behalf of MacDonald Law, P.C.<![CDATA[What to know about a revocable living trust]]>https://www.macdonald-law.com/?p=472312022-08-08T04:27:41Z2022-03-09T06:50:27ZYou can manage assets held in the trust's name
One of the key advantages of a revocable living trust is that you retain oversight of items that are held inside of it. This means that you can sell, transfer or otherwise manage your property as you see fit after the document is executed. If you were to become incapacitated, the secondary trustee would manage the trust on your behalf.
A living trust adds a layer of privacy
The terms of the trust are not a matter of public record, which can be ideal for your estate planning needs. With trusts, you don't have to worry about a sibling, cousin, or child learning that he or she didn't receive the same inheritance as other family members. Furthermore, you don't have to worry about the media potentially learning about the size of your estate or how much you passed down to a child or grandchild.
If you are looking to add flexibility to your estate plan, it may be in your best interest to create a revocable living trust. As the trustee, you have the final say over how the document is structured and what happens to assets after they are titled in its name. Furthermore, you have the ability to scrap the document at any time if you want or need to.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Are bypass trusts still valuable in estate planning?]]>https://www.macdonald-law.com/?p=472252022-08-08T04:28:07Z2022-02-24T22:43:04ZSpousal portability election limitations
Adding to the confusion in estate planning is the spousal portability election, passed into law permanently in 2013, that allows a surviving spouse to use the unused federal estate tax exemption of the deceased spouse, thereby giving the surviving spouse a double tax exemption. With the the benefits of this law, should married couples still consider a bypass trust to save their assets from estate taxation? In some instances, the answer is yes for the following reasons:
Portability won't remove appreciation in the value of the assets.
Portability won't apply if the surviving spouse remarries.
Portability won't apply for generation-skipping transfer tax purposes.
Ported assets will be subject to potential lawsuits.
Using portability will cause the first spouse to die to lose control when the ported assets pass to the survivor.
Bypass trusts are still a viable alternative
Given the limitations of spousal portability elections, many higher-wealth couples should still bypass trusts when revising their estate plans. Discussing the consequences with a financial advisor or an accountant should be part of the process.
Married couples have many different choices when deciding how to protect their assets for their beneficiaries. Periodic review of an estate plan is a wise course of action when considering that federal estate tax rules tend to change frequently.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Have a plan for your assets in Michigan after you’re gone]]>https://www.macdonald-law.com/?p=472212022-08-08T04:28:33Z2022-02-09T02:54:46ZCreating an estate plan in Michigan: Key elements
The first thing to consider in estate planning is deciding who will inherit your assets. You can choose to distribute your property in several different ways, but one of the most common methods is through a will. A will allows you to designate specific individuals or organizations to receive your property after you die. If you do not have a will, the court will dictate how your property is distributed, which may not be what you would have chosen.
Set up a trust. A trust allows you to appoint someone to manage your assets on behalf of your beneficiaries. This can be helpful if you want to ensure that your children or other loved ones receive money or property from you but do not want them to have direct control over those assets. A trust can also help avoid probate - the legal process of distributing a person's property after they die.
Why is it essential to plan for your assets?
For tax purposes. If you don't have an estate plan in place, the government will take a large chunk of your property and assets after you die to pay estate taxes. However, if you set up trusts and other mechanisms to distribute your property, you can reduce or even eliminate these taxes altogether.
You can control what happens to you and your property when incapacitated. Health care directives and financial power of attorney will dictate how a doctor should treat you when sick and who will make business or financial decisions for you when you can't.
An estate plan is something that everyone in Michigan should have. Even if you don't have vast property or heirs, you can use it to protect yourself when incapacitated.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Federal estate tax exemption]]>https://www.macdonald-law.com/?p=472172022-08-08T04:28:59Z2022-01-25T22:46:25ZMoving assets for maximum protection
There are financial tools that can be used to keep estate tax collectors from seizing financial holdings at passing. The ultimate goal is actually avoiding the probate process completely. This is usually accomplished easiest by setting up irrevocable trusts or a foundation that can be managed according to decedent instructions after the fact.
Alternate asset protection
Another option for some asset holders in avoiding estate and inheritance tax is early transference of wealth to eventual inheritors. This move takes the assets out of the hands of the primary owner and transfers them before passing as property of the inheritor. This not only applies to cash holdings, but also real estate and other personal property such as high-value vehicles.
Many times it is also better to make these changes sooner rather than later for individuals who know it will be an issue later. These steps also help in the event of an untimely death or an emergency health situation that ultimately results in death of the testator.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Why should all new parents have a will?]]>https://www.macdonald-law.com/?p=472152022-08-08T04:29:21Z2022-01-12T00:26:26ZWhat is a will?
A will is a legal document that is part of a person's estate plan. With a will, you can plan for the future and express where you want your money and property to go after your death. You can name beneficiaries, decide whether your assets should be donated to charity and name guardians for your minor children should you die.
Without a will, the court will appoint someone to serve as guardian to your children. This means that the person you truly trust to raise your children might not get that opportunity.
Why do new parents need a will?
All new parents should create their own will. It makes sure that your wishes are carried out after you pass away. With a will in place, you can ensure that the person you name as guardian for your minor child gets the child and raises them.
Your will allows you to decide how you want your assets and property distributed. You can name heirs who will receive property and assets upon your death. If your child is still a minor after you pass, they will receive property and assets once they turn 18 years old or whatever age you choose.
You can also name an executor for your will. This person oversees the will and ensures that your beneficiaries receive assets and property after your death. They are also responsible for handling financial aspects of your estate such as paying bills, debts and taxes.
During estate planning, you can also choose to create a trust to hold assets and property that you'll ultimately pass down to your child and other beneficiaries. You can oversee the trust during your lifetime and have another person named to oversee it upon your death.]]>On Behalf of MacDonald Law, P.C.<![CDATA[Using a corporate trustee can help avoid poor family dynamics]]>https://www.macdonald-law.com/?p=472132022-08-08T04:29:48Z2021-12-28T23:22:15ZWhat's the top reason for utilizing a corporate trustee?
One of the top reasons you may want to use a corporate trustee instead of a family member is your family's dynamics. If you can foresee squabbling occurring after you die when a family member is chosen to act as a trustee, it may be best to use a corporate trustee and bypass family members. Doing so helps avoid resentment or hurting one of your family member's feelings in the administration of the trust.
Are you dealing with a complex situation?
You may also want to use a corporate trustee for a complex situation. In this situation, unique tax and legal needs are usually required that may be beyond the scope of a family member's skills and knowledge. A corporate trustee has the objectivity, experience, and resources required to complete this task correctly. They have all of the beneficiaries' best interests in mind. They are impartial to the outcome, which may not occur if you have a blended family with children from other relationships.
Providing asset protection
You can also have problems if a beneficiary is serving as a trustee. Using a corporate trustee removes this possibility. They take this fiduciary obligation seriously as they know every move they make can be scrutinized. They will do their best to be fair and avoid the possibility of litigation.
Using a corporate trustee can be advantageous if you're dealing with a complex situation. You want to provide asset protection and avoid having problems within your family after you've died.]]>