Handout_Notes

Handout_Notes - Less charitable contributions under will or...

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HA 4422 Estate Planning Legal issues: Wills – what they can and can not do Living Wills Health Care Proxy Power of Attorney Titling of Assets and how they pass Regular ownership – through will Joint tenants with right of survivorship – automatically to survivor Beneficiary designations – to beneficiary Payable on death accounts (POD, TOD) – to beneficiary (Not all states have this option) Revocable Living Trust – no change, assets are in an irrevocable trust upon grantor’s death Irrevocable Trust – grantor’s death has no effect, the assets were no longer his/hers Probate – anything passing via will or state law goes through probate Estate Tax FMV of all assets at death (including life insurance policy amount) Less: liabilities Less: certain allowable expenses (attorney, executor, accountant, funeral expense)
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Unformatted text preview: Less: charitable contributions under will or beneficiary designation Less: transfers to spouse = Taxable estate Plus: life-time taxable gifts (up to 1 million) Calculate tax (graduated rates up to 45%) Less: Applicable Credit Estate tax payable “Applicable Credit Amount” (fka Unified Credit) Each US person has a unified credit. It is equal to the tax that would be due on a taxable estate equal to the tax-free estate amount in a given year. Gifts Up to (currently) $12,000 can be given to any one individual in any one year. Amounts over $12,000 are taxable gifts – file a gift tax return. Some things are not subject to gift tax: Direct payment of educational costs Direct payment of medical costs Payments to spouse Charitable Contributions...
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This note was uploaded on 02/20/2009 for the course H ADM 422 taught by Professor Lhensley during the Fall '08 term at Cornell.

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Handout_Notes - Less charitable contributions under will or...

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