Rachel Emma Silverman - The Wall Street Journal Complete Estate-Planning Guidebook

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Copyright 2011 by Dow Jones & Company, Inc.

All rights reserved.
Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York.
www.crownpublishing.com

CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc.

Library of Congress Cataloging-in-Publication Data

Silverman, Rachel Emma.
The Wall Street Journal complete estate-planning guidebook / by Rachel Emma Silverman.1st ed.
p. cm.
1. Estate planning. 2. Finance, Personal. I. Wall Street Journal. II. Title.
HG179.S4746 2011
332.024016dc23 2011023496

Ebook ISBN: 9780307461285

Cover illustration Peter Hoey

v3.1_r1

T O A LEX , S AM AND E THAN,
FOR EVERYTHING

ou cant avoid death or taxes.

But by carefully drafting your will and medical directives, and by having clear discussions with your family, you can reduce the chances that your relatives will squabble over your medical care or your heirlooms. And while few people are subject to the federal estate tax under the recently passed tax law, if youre one of them, you can use strategies such as trusts, life insurance and philanthropy to vastly reduce the amount of money that goes to the tax man and increase what goes to your heirs or to the causes you believe in.

In The Wall Street Journal Complete Estate-Planning Guidebook Ill take you through the estate-planning process, step-by-stepfrom helping you figure out your planning goals (benefiting your children? minimizing estate taxes? caring for Fido?) to helping you divvy up your familys silver so your kids dont fight over it.

The book is structured around the main estate-planning tools you will likely encounter: wills, trusts, life insurance, guardianship papers, advance medical directives (which spell out your wishes in case you become severely incapacitated) and power-of-attorney documents (which grant another person the power to make decisions about your medical care or finances when you cannot). Ill also help you decode the technical jargon that estate planners often use, so you feel comfortable discussing QTIPs and QPRTs when you sit down with your lawyer.

Some situations require more complicated planning, so in special sections throughout the book, called A Deeper Look, Ill talk about how to handle your estate if youre single, are in an unmarried or same-sex relationship, are in a remarriage or have a family member who is disabled or has special needs and you serve as a family caregiver. Ill also address the growing asset protection industry, which seeks to shield estates from the hands of creditors or divorcing spouses. And since many of us are pet owners, Ill discuss how to plan for our furry friends.

In the , Getting Started, Ill cover key steps you should take before you and your lawyer draft your will, trust and other documents. Here, I will help you figure out your estate-planning goals, show you how to take stock of your possessions and provide strategies for talking these ideas over with your family. This chapter also offers guidance on how to choose a lawyer and other estate advisers. Clarifying your estate-planning objectives and discussing them with your family will likely save you money and timeand minimize argumentsin the long run. Ill also provide information here about key estate-planning steps to take at different stages in your life.

In , Death and Taxes, Ill explain how estate, gift and generation-skipping taxes work and introduce some strategies to help minimize them. Under current law, these taxes affect just a small number of people, but its still important to understand how they work.

In necessarily equaland Ill offer some ideas about how to balance out bequests and gifts to heirs who may have very different economic and family circumstances.

While a will is an essential part of any estate plan, not all of your assets are governed by the terms of your will. In , Probate and Ways to Avoid It, Ill explain how some key assetsincluding retirement plans, insurance policies, certain jointly owned property and some trustsdont pass through wills and arent subject to the legal process of probate. (Probate is a time-consuming court procedure that divides up your property as directed by your will.) Ill help you make sure your property goes to your intended heirs. Ill also talk about how to pass on individual retirement accounts, or IRAs, which are subject to all sorts of complex rules.

In , Ill show how to use trusts and other tactics to protect your assets from creditors and lawsuits.

In , Life Insurance, Ill go over this valuable tool for providing for your familys future. Ill discuss the differences between term and permanent life insurance and how to best structure your life insurance policy to reduce estate taxes. And Ill go over some basic insurance, tax and estate-planning strategies for passing on family businesses.

In giving and how such generosity doesnt just help important causes but also can help you reduce taxes and provide for your family members. Ill talk about different ways to make charitable gifts, including direct bequests and charitable trusts, and Ill explain the pros and cons of setting up your own charitable foundation.

In , Ill cover planning for family members with special needs. Ill also talk about making funeral and burial plans. And Ill address how to plan for your pets care when you are not around.

In , Ill discuss an unusual but effective way to help keep family harmony: paying family members for their caregiving contributions if you or your spouse become incapacitated.