EVERYTHING A BABY BOOMER SHOULD KNOW -- An Insider's Guide To Estate Planning
How The Federal Exemption Tax Works
First, you have to be married. Second, your spouse has to be a U.S. citizen. Third, each spouse has an opportunity during their lifetime (not after death) to set aside from their share of the estate the “Federal Tax exclusion limit” which in the years ’06,’07, and ’08 is $2,000,000. This is $2,000,000 that the family does not have to pay estate tax on when the first parent dies.
This “applicable exclusion amount” will also never be included as part of the surviving parent’s estate, so the children will not be taxed on the money at the death of the second parent either. This is not the case with the QTIP trust.
This means you can put $2,000,000 (your half of a $4,000,000 estate) into a credit shelter trust, such as the Bypass Trust, when you die and this money can sit tax free to be used for the benefit of your surviving spouse during their entire life.
Then, the $2,000,000, or what is left of it, will pass directly to your children upon the death of the second parent. The children do not pay federal tax on either the $2,000,000 that was in the Bypass Trust, or the $2,000,000 left by the surviving spouse.
There's much more...
An Insider's Guide to Estate Planning
THE NEWEST APPROACH
TO ESTATE PLANNING:
KNOW WHAT YOU’RE TALKING ABOUT!
Why pay money so an attorney can try and explain the difference between a Bypass Trust and a QTIP Trust, when this book will answer that question long before you have to pay for a consultation?
This guidebook helps you map out your estate plan so it goes exactly where you want it to go. It explains the tools you need to give away or preserve your money, homes, businesses, heirlooms, cars, boats, jewelry, tools, art, memorabilia, and every other artifact of life you have accumulated over the last 45 to 65 baby booming years.
(Proud Father of the Bride)
Mark S. Cornwall, Esq.
210 E. Figueroa Street
Santa Barbara, CA 93101