Text Box: YES NO Who are your ultimate beneficiaries if no one in your immediate family survives you? If they are your “heirs,” as defined by state law - Would you prefer that some part or all of your assets pass to charity? _____ _____ Are there specific individuals, rather than your heirs generally, who should receive your estate? _____ _____ IF YOU WOULD LIKE TO DISCUSS CHANGING YOUR PRIMARY OR CONTINGENT BENEFICIARIES IN ANY OF THE ABOVE CATEGORIES, PLEASE GIVE ME A CALL. FEDERAL TAX LAW CHECK-UP An estate planning check-up should also ensure that your plan takes advantage of the recent changes in federal and state tax laws. Although the issue of permanent federal estate tax repeal is still being debated in Washington, such repeal would apply only after the year 2010. In the meantime, the exemption amount for estate taxes will continue to increase. (For a listing of the exemption amounts between 2003 and 2009, go to our website, www.haganlaw.net, and review the Estate Planning section.) We should review your estate plan and possibly update it to provide greater flexibility during this time of transition. The increasing exemption amounts will now allow families to plan their estates without employing techniques whose sole purpose was estate tax avoidance. For example, a mandatory credit shelter trust created for the surviving spouse may no longer be necessary in your case. Given the uncertainty of actual repeal, it is still prudent to be concerned about facing some sort of federal tax on your estates. Many clients are choosing to modify their plan by providing for an optional disclaimer-type trust for the surviving spouse, which the surviving spouse may choose to create after the first spouse’s death. OTHER COMMON ESTATE PLANNING MISTAKES THAT MIGHT NEED CORRECTING 1. Incorrect ownership of property which fails to maximize the estate tax exemption. Not only should wealthier clients have some form of tax-savings trust for the surviving spouse as part of their estate plans, but ideally each spouse should own enough assets in his or her sole name in order to fully fund this trust. Too much property held by the spouses in joint names can prevent maximum tax savings. This suggests a review of how your assets are currently titled, and perhaps dividing jointly owned assets into each spouse's name. 2. Incorrect beneficiary designations. The largest assets in many clients' estates are their retirement accounts, annuities, and life insurance. These assets will pass by beneficiary designation, not under your will, so that such designations need to be coordinated with your underlying estate plan. Check your beneficiary designations to make sure they are consistent with your wills and trusts. (continued on page 4) Text Box: Page #

Estate planning check-up for

the new year

DISCLAIMER

Martin J. Hagan is licensed to practice law in the Commonwealth of Pennsylvania. This website is intended solely for informational use and is not intended to solicit clients. Likewise, any information contained in or obtained from this web site is for informational purposes only and is not intended to be used as legal advice.

IRS CIRCULAR 230 DISCLAIMER:   Pursuant to Treasury guidelines, any tax advice contained in this website (or any link from it) does not constitute a formal opinion. Accordingly, any tax advice contained in this website (or any link from it) is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be asserted by the Internal Revenue Service. You should seek advice based on your particular circumstances from an independent tax advisor.

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Copyright © 2007 Martin J. Hagan, One Gateway Center - 8 South; Pittsburgh, PA 15222-1435
Last Updated: 06/29/07