It is that time of year when thoughts turn to taxes. A key part of tax planning is deciding how to manage your estate.  This book, part of NOLO’s “Personal Finance Essentials” is one of many books on the subject. As noted in the introduction it is aimed at five basic concepts: “leaving property, providing for young children, planning for incapacity, avoiding probate and reducing taxes.”

 

The first chapter looks at setting goals for your estate planning.  That is done by determining what you own, who you want to give it to, how to avoid probate now that they have explained what that is, the necessity of a will, tax situations, etc. This chapter gives a brief snapshot of a variety of situations which should cover most people and the basics involved.

 

Chapter two dives into situations that are difficult at best. Resolving family conflict is key and old sibling rivalries and other issues may rise again and threaten your planning. That possibility along with dealing with taking care of special needs children, multiple marriages, cohabitation, disinheriting family members and more are covered.  Most of this advice seems to be generic, common sense stuff, with little detail. As a parent of special needs children, I was very disappointed in the very brief discussion on the topic and found it nearly worthless despite the reference to one point later in the book.

 

Chapter three covers the rules for property ownership for married couples. Texas is a community property state, as noted in the chapter, and as such that means that both my wife and I share ownership in something even if only one name is on the title or deed. We also incur the debt load equally and the income as long as we are living together. The authors go into great detail by definitions and example illustrating what is community property and what is separate property. They also illustrate rules for different states and how moving from one state to another can and will change things.

 

Chapter four covers how to inventory what have you have. You need to figure out what you own, what you owe, and what your net worth is. This is a fairly straight forward deal that you should be doing anyway as you work on your taxes. The authors make the point to count everything (including frequent flyer miles), to plan for your cyber accounts and groups, and keep good records.  To that last point, a number of mostly blank form pages are included so that you can list your property and determine net worth.

 

“Your Beneficiaries” is the theme of chapter five. Over eleven pages, this chapter covers the types of beneficiaries, what you can do with them, and various possibilities and outcomes including disinheritance and no-contest clauses.

 

Chapter six returns again to the topic of children and setting things up for them. Whether you want your spouse to be in charge, a trust, want to make educational investments for college, etc are all covered along with numerous other situations. Like most of the chapters in this book, this complicated subject is skimmed lightly to give the reader a working knowledge basis to build from but not much more than the absolute basics.

 

Wills come next and the many types are defined, explained as are their limitations. Chapter seven also covers whether or not you need an explanatory letter with your will and how to best write one. What happens to your will upon a divorce is also briefly covered.

Chapter eight covers probate and how to avoid it. In most cases, one does want to avoid probate but the authors also consider when probate would be best.  At eight pages of information, this is one of the shortest chapters in the book.

 

Living trusts and all their many varieties and ramifications are considered in chapter nine. After you create one, you must keep it up to date and this chapter address that part of the issue as well.

 

Chapter ten considers the idea of joint tenancy and its many complications. Simplifying greatly, this is when co-own something and do so to avoid probate later. Primarily this is housing and or land. Over eighteen pages, the authors consider the subject and explain how it works, positives and negatives, and how it can affect your estate planning.

 

Maybe you want to set up something that will pay certain accounts upon death. That concept is covered in chapter eleven along with how to set up transfer-on-death deeds for real estate.

 

Chapter twelve covers the concept of “life insurance” and all its many types, rules, taxes, etc.

 

Retirement benefits such as 401 k’s, Roth IRA’s etc get the same brief overview in chapter thirteen.

 

There are state law exemptions to probate and those are covered in chapter fourteen. California, New York, Florida and my state of Texas, are highlighted with very brief explanations.

 

Chapter fifteen covers the thorny issue of estate taxes. Will the estate owe taxes, how to calculate them, how to redeem them, etc are all covered both from a federal and state level.

 

Chapter sixteen covers the same issue; from a “gift” angle. It defines what a gift is, how to value a gift, how to use gifts to reduce estate taxes, etc.

 

Trusts are covered in the next several chapters with chapter seventeen giving “An Overview of Ongoing Trusts.”  As noted, this chapter is an overview and explains what they are and how they work. Chapter eighteen covers the subject of “Bypass Trusts” and how they can help reduce the tax bill. Chapter nineteen looks at other tax saving trusts for married people and primarily considers to “Qualified Terminable Interest Property” trust also known as QTIP. Chapter twenty delves into the various charitable trusts and how they work. Chapter twenty-one continues the trust angle with numerous other types of trusts such as “Grantor-Retained Annuity Trusts, Grantor-Retained Income trusts” and many more.

 

Chapter twenty-two explains how one can disclaim property that has been assigned to you through inheritance. Like everything else, there are rules and procedures as well as reason to do this.

 

Chapter twenty-three returns to the idea of trusts and explains how to combine them. Chapter twenty-four considers trusts for the second or more marriage. More controls for property are considered in chapter twenty-five.

 

Incapacity and how to have things setup to make medical and financial decisions is the theme of twenty-six. That naturally leads into death, body and organ donations, funerals and all the rest of it in chapter twenty-seven.

 

Do you have a family business?  That finally gets covered in chapter twenty-eight and how to deal with it. That naturally leads into the need of lawyers which is covered in twenty-nine.  

 

So finally you have your estate plan.  What to do next is the theme of chapter thirty regarding all of the many things you have created.

 

Then, after all the planning is done, everything is set up and now comes crunch time. The death has happened. Chapter thirty-one addresses what has happened and how to follow through on all that planning.

 

Chapter thirty-two considers eight widely different scenarios of people needing estate planning and how they should set up things based on their particular situations.

 

An eleven page glossary of terms, various appendices on tax rules, a twenty five page index, and a couple of ads for other NOLO products and services bring this 552 page book to a close.

 

Released last April this informative book meets the five goals set out in the introduction. Straight forward and simple to read, it gives the reader a basic working knowledge of the subject matter and serves as a good reference point or resource guide. Like any book on the subject, the information in it is subject to change and depending on the complexity of your situation it might be best to consult with a professional. Still, for the market and knowledge base this book is aimed for, it does the job well and is a very good source of info.

 

Plan Your Estate: Protect Your Love Ones, Property & Finances (9th Edition)

By Attorney Denis Clifford

NOLO

http://www.nolo.com

April 2008

ISBN# 1-4133-0761-2

552 Pages

Paperback

$44.99

  

Review copy provided by the Plano, Texas Public Library System.

 

Kevin R. Tipple © 2009

 

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